Pension schemes; does the UK model fit the local scenario : investigating the opportunities and threats of the UK model

Abstract

The Pay As You Go (PAYG) system of pensions is being currently reviewed in many countries. This review resulted from the lack of sustainability in the system due to an ever aging population. The result of this is that the Maltese Government is considering the possibility of introducing the second pillar (P2) system of pensions on a mandatory basis, the same as the first pillar (P1) type of pensions, with the help of the Pensions Working Group (PWG). At present, the UK is undergoing a reform in its pensions, where the second pillar type (P2) of pensions in conjunction with the private sector is being discussed. In fact in October 2012, changes to UK pension law will affect all employers with at least one worker. This study is a hypothetical analysis of how Malta would be affected if this type of system were to be implemented locally. The objectives of this dissertation are to examine and discuss how the UK reform is going to impact UK employers and employees of both SME companies and large companies and studying how English laws have changed and how these changes are going to affect the regulator. The main focus of this study is on how the adaptation method of the English law may prove an exemplary case study should in the future Malta change its laws to accommodate this reform.