Management and administration of pension funds : some lessons for Malta

Abstract

This study puts forward a basic model for the purposes of fund managers in aiming to take advantage of the pensions situation in Malta. Mainly this dissertation is divided into three parts. The first part of this study focuses on the identification of the main alternatives available for the saver, with the advantages and disadvantages they carry with. An important part of this chapter focuses on the transferability of the pension benefits. Portability is highly critical considering that an average person changes employer around five times during his life. Finally to conclude the fist part some international practical examples are taken in consideration. The study then proceeds with evaluating the way the private pension funds can be managed and administered. Initially the parts of the organization and the related parties are discussed. Then the study enters step by step in three procedures for good management of funds, i.e. setting an investment policy, implementing it and the monitoring of the performance and risks of the investment decisions. The chapter also recommends how the defined benefit and defined contribution pension schemes should be managed. Finally the last part focuses in detail on the distribution stage in pensions. In my opinion this stage is the critical stage in pensions. This chapter highlights the problems a market can face with the annuities and it recommends how these can be tackled. The taxation part is also discussed in is part of the dissertation. I concluded this study by looking at the taxation benefits to be introduced soon in the UK, and see their effect and what the outcome would be should a similar legislation be implemented also in Malta.