Following the issue of a consultation document on the proposed amendments to the Retirement Pensions Act and on the amendments to the Pension Rules, the MFSA has published the new rules for Occupational Retirement Schemes. The rules apply to pension schemes, retirement funds and service providers and deal with matters such as the required contents of scheme documents, reporting requirements, schedule of payments and the actuarial Transfer Value Certificate.
This process was carried out in order to transpose Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (“the IORP II Directive”).
The IORP II Directive is a minimum harmonisation directive that introduces a new regulatory framework for occupational retirement schemes, and its main objective is to provide for the adequate protection of members and beneficiaries of occupational retirement schemes. The legislation aims to ensure higher standards of governance and a modern risk-based governance system to improve risk management and transparency of institutions for occupational retirement provision.
In order to complete the transposition of the IORP II Directive, various amendments were required to be made to the Pension Rules. The Pension Rules issued under the Retirement Pensions Act (Cap.514) supplement the Retirement and the following Legal Notices:
The amendments were primarily carried out to transpose the remaining provisions of the IORP II Directive, which had not been included in the Act and regulations issued thereunder. Such amendments also aligned the Pensions Rules for Occupational Retirement Schemes with some of the requirements that have been introduced in the Pension Rules for Personal Retirement Schemes.
This article was written by Dr Cherise Abela Grech and Dr Luke Mizzi.
Disclaimer: This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.