Retirement savings in Malta : is there a role for workplace pensions?

Abstract

This paper seeks to understand the main factors that influence individual willingness to participate in a workplace pension scheme. The topic of workplace or occupational pensions has garnered significant interest in recent years, particularly because of concerns related to the sustainability of public pensions within the EU due to rising population ageing. To this end, we conduct a series of computer-assisted telephone interviews (CATI) across a sample of workers in Malta who are members of a leading trade union. The questionnaire delves into a variety of issues, notably savings and investment behaviour, risk appetite as well as perceptions regarding workplace pensions. The results show that respondents’ willingness to save in a workplace pension scheme is strongly driven by individual trust levels in such schemes. In turn, logistic regression results indicate that trust in such schemes is positively associated with being male, high levels of income and higher levels of risk tolerance. We discuss these findings in terms of their implications for the widespread uptake of workplace pensions in Malta and their potential impact on retirement earnings and inequality. We also discuss the importance of trade unions in ensuring that such schemes appeal and are accessible to a diverse array of workers in the Maltese labour force, ensuring that their needs and concerns are addressed while also driving forward any legislative measures to protect investors.