The amendments were made to the country’s income tax legislation on Wednesday.
There were concerns that new rules under the Retirement Pensions Act, which came into force on 1 January 2016, were being “misinterpreted” by providers of qualifying recognised overseas pension schemes (Qrops).
Speaking to International Adviser, Stewart Davies, group chief executive of Momentum Pensions, said the legislation was originally sought to regulate all pension activities based on the island, but that some providers wrongly assumed this reduced the existing pension commencement lump sum (PCLS) rate from 30% to 25%.
He added that Momentum has been in “dialogue” with the Maltese Financial Services Authority (MFSA) since the introduction of the new laws earlier this year, urging them to provide a “clarification” of the rules.
The resulting clarification now makes clear that a Maltese Qrops can allow up to a 30% pension commencement lump sum (PCLS) which can be taken on a phased basis, depending on the value of the pension scheme assets at the time benefits commence and over a maximum period of 12 months from this date.
“The central cornerstone of many people’s retirement planning, pensions, need cast iron rules and regulations. This is why we recently carried out significant lobbying to bring this clarification to the statute books in Malta.
“We are pleased to have been so instrumental in achieving this level of certainty and are grateful for the reactiveness of the regulators in Malta on this matter, which is vital to not only look after the assets of existing pension policy holders but also to engage future generations looking to maximise their retirement provision.” said Davies, whose company also has offices in Gibraltar and the Isle of Man.
