Minister for Social Policy and Children’s Rights Michael Falzon tabled the 2025 Report of the Pensions Strategy Group.
The group’s report, led by Permanent Secretary Mark Musu, forms part of the five-yearly legal review of pensions in Malta, which focuses on adequacy, sustainability and social solidarity.
The review is taking place at a time of rapid demographic change: fertility has fallen to 1.06 while life expectancy continues to increase, leading to a faster ageing population. By 2070, people aged 65 or over are expected to reach 33.6% of the population, while the Old Age Dependency Ratio, in other words the ratio of pensioners to workers, is expected to double in another 45 years. This is while the country has seen positive changes in the labour sector including record employment rates, higher female participation and an increase in foreign workers.
Recent reforms — including the way the pension increases annually, higher pensionable income limits including for those born before 1962, stronger contribution credits and improvements to minimum pensions — have improved adequacy by around 5 percentage points.
The incentive for a person to receive an additional pension increase of up to a maximum of 29% if they choose to continue working and take their pension later has attracted almost 7,900 people since 2016. All this has led to long-term projections showing that sustainability has also improved, with the point when spending starts to exceed income, previously estimated to happen in 2051, now moved forward 3 years to 2054.
While no increase in either the retirement age or the social security contribution rate is contemplated, the Pensions Strategy Group highlights several structural issues that require further analysis, including the role of migration, wage composition, job quality, the impact of child-rearing, participation in private pensions, alignment of the Guaranteed Minimum Pension Level and fertility policies.
The public is invited to provide their feedback on 14 questions as part of the public consultation between Monday 5 January and Friday 3 April 2026. This will help the Group formulate its recommendations on the future direction of the pensions system in our country.
