David Spiteri Gingell

Management Consultant

David Spiteri Gingell has worked in government, the private sector and overseas, and has had the privilege of being involved in a number of national reforms in different policy areas locally – including ICT, public administration, energy, pensions and research and innovation.


Occupational pension automatic enrolment: A model for Malta?

Tuesday 17th May 2016

2004 saw a wide-ranging reform of the pension system. The reform was not limited to the state pension, but embraced other fundamentals such as saving for retirement, increasing labour participation and addressing changing norms. The then government embraced and implemented significant changes regarding the state pension, increasing female/elderly active participation, yet on one key matter, fundamental reforms were disregarded.

The reform group concluded that the state pension, which provides for inter-generational solidarity, remained an important foundation of the pension architecture – though rendering the system adequate and sustainable required significant changes. The reform group, however, recognised that the state pension alone would not provide an income that allows a middle-income earner to enjoy a quality of life to that enjoyed in pre-retirement. A middle-income earner can only enjoy such an income in retirement if they complemented their state pension with a savings retirement nest egg.

Two primary saving instruments were proposed. The first was the creation of private pension vehicle in which a person could enter into (third pension). Given that behaviour heuristics inhibit people from saving for the long term, such instruments are tax incentivised. A no brainer – or so it was believed. For reasons that are difficult to understand, the previous government failed to act. Indeed, the first third pension products hit the market only in November 2015. A generation was denied the opportunity to be ‘nudged’ into saving for their retirement.

The second saving instrument was, at the outset, recognised to be far more complex. Studies overseas showed at the time that uptake in third pensions, despite tax incentives, tend to be low. In 2004, the vehicle governments applied to overcome behavioural heuristics were the mandatory second pension. The mandatory second pension, as commonly understood, is an employer-employee private pension scheme to which both parties are compelled by government to contribute. Unlike the state pension, the second pension is an individual pension, which accrues interest on savings made, is portable, etc.

The recommendations generated controversy. Many argued that a mandatory second pension would erode competitivity and decrease disposable income with potential multiplier impacts on the economy generally. The government, opposition, unions, employers, etcetera all came out strongly against a mandatory second option. The result is that 12 years later, the debate on the introduction of a mandatory pension still rages on – the primary difference being that the government at the time, now the opposition, had a Damascus moment.

It is unfortunate that the debate continues to be constrained to the question of whether Malta should introduce a mandatory second pension. This is not the right question. The question, rather, should be whether we can introduce a pension vehicle that successfully overcomes behaviour heuristics.

The answer is yes. Much has changed since 2004. Of particular note is the emergence of the automatic enrolment model: that is a person is mandatorily enrolled into a pension scheme but can still opt out. This concept turns inertia on its head: once a person is enrolled, they are unlikely to opt out. Moreover, if you enrol a person in their first job, they would not have moulded a structured spending profile (mortgage, school fees etc). The most successful example of the automatic enrolment model is the Kiwi Saver in New Zealand – and recently replicated in the EU by the NEST scheme in the UK.

Marrying the introduction of a work place pension scheme based on automatic enrolment with corporate tax incentives can result in two impacts. First, it may attract enterprises who are model employers to introduce a pension scheme as a means of retaining their human capital assets. Second, it presents trade unions with a new workplace benefit to bring on the collective bargaining benefit.


Daniel Bugeja

Business Doctor


The Importance of Assessing Staff Engagement Within Your Company

January 2018

Having strong engagement within a company yields better results in general

Joseph Micallef

Chief Operations Officer at BEAT


The Individual As The Driver Of Change

January 2018

Change remains one of the most topical – and in many ways, still controversial – aspects of organisational management.

George Mangion

Senior Partner, PKF Malta


The shifting sands of our financial services sector

January 2018

At a slow but unrelenting pace, the mood for change in Europe is getting stronger following the BEPS and ATID measures, not to mention the negative publicity from the PANA review.

Paul Bugeja

CEO of the Malta Tourism Authority


Sustaining the Valletta 2018 effect

December 2017

Now that Valletta 2018 is round the corner, it is satisfying to note that the build-up of marketing towards it has generated a positive effect for the Maltese islands.

Daniel Debono

EU affairs manager, Head of Brussels operations, Malta Business Bureau


2018: A Critical Year For The EU To Deliver

December 2017

When one looks back at President Juncker’s 10 political guidelines that were set at the beginning of his mandate, one concludes that this last Commission programme is a continuation of the work undertaken over the past four years, and aims to complete some of the political projects.

Louis Olivieri

Marketing Specialist


Corporate Anniversaries – More Than A Reason To Party

December 2017

It pays organisations to capitalise on special occasions with elements which contribute to and/or are compatible with the reasons for their existence and growth path.