MFSA Flags Widespread Disclosure Failures in Pension Statements
A thematic review by the MFSA found that many pension statements lack mandatory disclosures, pointing to broader governance weaknesses among licensed administrators.
The MFSA has identified significant shortcomings in how licensed Retirement Scheme Administrators communicate with pension members, following a thematic review of statements for the 2024 reporting period.
The review covered five RSAs, representing 45% of all licensed administrators in Malta, and examined 155 Member Statements and 45 Pension Benefit Statements.
For member-directed personal retirement schemes, the Authority found that several statements omitted key information on underlying investments, charges and fees, contributions, investment managers or advisers, and material changes affecting members' accounts. In some cases, statements were either not issued at all or were not fully aligned with the Pension Rules.
Non-member-directed personal retirement schemes also fell short, with inadequate disclosures on contributions, retirement benefits, and applicable charges.
Occupational retirement schemes fared no better. The reviewed Pension Benefit Statements lacked complete information on costs and charges, retirement age assumptions, member identification details, and other required disclosures. The MFSA also noted that these statements did not include information on material changes during the reporting period.
According to the MFSA, the problems go beyond missing data. The Authority pointed to broader weaknesses in governance, oversight, and quality assurance processes among RSAs. Such shortcomings may affect members' ability to understand their retirement savings and make informed decisions.
The MFSA expects all RSAs to ensure that Member Statements and Pension Benefit Statements comply fully with regulatory requirements, contain all mandatory disclosures, and are backed by robust governance and quality assurance. Administrators must also conduct a gap analysis against the observations outlined in the Dear CEO Letter and implement necessary improvements.
The Authority will continue to monitor the sector through thematic reviews, off-site supervisory work, and onsite inspections. Where material or recurring deficiencies are identified, the MFSA may use its supervisory and regulatory powers as appropriate.
For Malta's pensions industry, the message is clear: the regulator is tightening oversight on member communications, and administrators that fail to raise their standards risk enforcement action.