The financial implications of introducing occupational pension schemes within local firms

Abstract

The primary objective of the study was to provide additional literature on occupational pension schemes within the local context. The study analyses the financial costs and benefits that local firms would encounter on introducing such schemes. Three different samples were identified in the methodological process namely insurance companies, audit firms and trade unions. The insurance companies provided the financial and investment aspect of the study primarily outlining the financial risks of defined benefit schemes in relation to defined contribution schemes. In addition to the financial costs, financial benefits were also identified on the introduction of such schemes including human resources benefits, tax implications and other advantages. The audit firms provided the accounting requirements under International Accounting Standard 19 together with any additional auditing requirements. Due to the fact that occupational pension schemes are still at the research stage amongst local audit firms, the study was extended to interview abroad to outline the pension services offered by foreign audit firms. The services offered abroad were then analysed in the context of local resources and services. Finally, it was concluded that the pension investment services in Malta are likely to be provided by local insurance companies whilst local audit firms would assist employers with the design and implementation of the pension system providing accounting, consulting, tax and other services. In addition, the political perspective of local trade unions and the pension implications of Malta’s entry to the European Union were also reported.