Two out of every three Maltese surveyed recently were not aware of the maximum weekly pension income they will receive on retirement, a statistic that is of considerable concern to the Pensions Strategy Group.

The group chairman, Mark Musu, explained that people needed to first understand what they could expect in retirement before they could work out what additional income they would need to maintain their desired lifestyle. However, the next step was just as important: understanding how to get that income through savings or investment, and making the right choices.

“Are persons aware of the income they will receive from their social security pension? Will the pension income they will receive be enough for their retirement plans and the quality of life sought? If not, to what extent have they started to build their retirement savings nest egg so that they can live their retirement as desired?” the strategy explained.

“Understanding the importance of planning for retirement alone, however, is not enough. A person also has to be financially literate so that they make sure that the returns from the savings and/or investments … result in the financial rewards sought.”

These two aspects are the main thrusts of the Draft National Strategy for Retirement Income and Financial Literacy launched yesterday, which was drawn up on the recommendation of the group in June 2015. The ideas were refined through consultation with a limited group of stakeholders and the draft is now being opened to public consultation for eight weeks.

Once feedback has been collated, it will be passed on to the ministries for finance, education and social solidarity, before being presented to Cabinet for action.

The action plan covers the period 2016-2018 and is based on the principle of first informing people so that they can make better decisions and helping them to plan across their lifecycle and then take action accordingly.

The group also proposed the setting up of national commission which will coordinate the strategy once it is up and running.

Send your feedback to financialeducation.mfss@gov.mt by March 23. Find more details in The Business Observer tomorrow.