Pension Entitlements

Relevance

Accrued-to-date pension entitlements represent the monetary amount a pension provider is required to set aside in present day to be able to cover all the pensions accrued through contributions paid by eligible persons and to be paid out during future periods.

Following EU Regulation 549 of 2013 of the European Parliament and of the Council of 21 May 2013 it has become compulsory for all EU Member States to report their total pension entitlements accumulated by every member of employment-related pension schemes or social security pension schemes. The resulting entitlements are to be inserted in a new supplementary table on pension schemes (Table 29) and transmitted to Eurostat.

In Malta’s case, Table 29 records the total pension entitlements amassed from the (i) Social Security and (ii) Treasury pension systems.

Methodological description

In collaboration with the Research Centre for Generational Contracts (RCG) at Freiburg University, a suitable model was formulated to estimate Malta’s pension entitlements. Pensioners and Contributors micro datasets were obtained from the Department of Social Security and the Treasury Department and inserted into the model.

A forward-looking approach is applied to estimate pension entitlements, taking into consideration each eligible contributor’s historical data in order to forecast their future entitlements. Current pensioners have already obtained their full rights and so their maximum entitlements have already been identified.

Accuracy and reliability of data

Data quality is assured through adherence of the guidelines established in the Eurostat/ECB Technical Compilation Guide for Pension Data in National Accounts.

Furthermore, any changes made to the Maltese pension system or to the key model assumptions (discount rate, wage rate, etc.) are inserted into the model during the base year in which such changes occurred.

Accrued-to-date pension entitlements do not represent a measurement of a pension’s system sustainability. Only entitlements up to the reference year in question are taken into consideration, implying a limited time horizon. Moreover all present or future assets in relation to the pension system are being disregarded. Such assets are necessary for one to be able to assess the long-term sustainability for any pension system.

Timeliness and punctuality of data

According to ESA 2010 requirements, data is to be transmitted to Eurostat two years (‘t+24 months’) after the end of the reference period. It is compulsory for Member states to transmit Table 29 every three years. For the years in between countries are invited to send their entitlements on a voluntary basis.

Following the transmission of Table 29 to Eurostat, the NSO publishes a news release focusing on Malta’s pension entitlements. Data for reference year t is published within ‘t+30 months’, as scheduled in the News Release Calendar. 

Accessibility and clarity of data

Pensions publications for Malta and other countries may be accessed from the following link found on the Eurostat website: http://ec.europa.eu/eurostat/web/pensions/other-information.

In addition to Table 29, Eurostat also requested countries to transmit pension fact sheets (link provided below). A summary of the main criteria applicable for each pension system is provided in these sheets, along with a brief explanation of the data and model used to compute the accrued pension rights. Any major assumptions and reforms incorporated into the model are also listed in the fact sheets.

Coherence and comparability/consistency of data

Standard assumptions established in the Eurostat/ECB Technical Compilation Guide were applied by all countries in their pension entitlement calculations, hence ensuring geographical comparability.

Pension entitlements data is available and comparable from 2012 onwards.  Any changes in entitlements due to pension reforms, changes made to the key model assumptions or any other changes in volume are reported separately in Table 29.

 

Other Documents:​ ​

Accrued-to-date Pension Entitlements in Social Insurance​