dra$ na’onal strategy for re’rement income and financial ...… · 03.1 - introduc’on 40 03.2...

Dra$Na'onalStrategyforRe'rementIncomeandFinancialLiteracy:Knowledge,Planning,Ac'on

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DRAFT NATIONAL STRATEGY FOR RETIREMENT INCOME & FINANCIAL LITERACY

KNOWLEDGE, PLANNING, ACTION

2016-2018

Public Consultation | January 2016


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Ignoranceisnotblissandcanleadtopeoplesavingtooli2leandge3ngsurprisedastheyapproachandenterre7rement

Clarketal.2006


ThisDra$Strategyispresentedforpublicconsulta'onanddiscussion.Thepublicconsulta'onanddiscussionwilltakeplacebetween27thJanuary2016and23rdMarch2016.

Theworkinggroupisreadytomeetwithanyorganisa'onorpersonwillingtodiscusstheDra$Strategyandpresentrecommenda'ons.

FormalfeedbackoranycontactwiththeCommissionistobesenton:financialeduca*[email protected]

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mailto:[email protected]


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PublicConsulta'onandDiscussion 3

Execu'veSummary 7

Glossary 12

Chapter01–Introduc7on

01.1–Background 14

01.2–Recommenda'onsProposedbythePensionsStrategyGroup 16

01.3–ADra$Na'onalStrategyforRe'rementIncomeandFinancialLiteracy:Knowledge,PlanningandAction

17

Chapter02–UnderstandingRe7rementIncomeandFinancialLiteracy

02.1–UnderstandingtheImportanceofSavingforOne’sRe'rement 19

02.2–SecuringFinancialLiteracyandRe'rementPlanning 31

Chapter03–StrategicMeasuresonRe7rementIncomeandFinancialLiteracy

03.1-Introduc'on 40

03.2–VisionwithregardtoImprovingtheFinancialWell-beingofMalteseCi'zens 41

03.3–ThePrinciplesUnderpinningtheAttainmentoftheVision 41

03.4–StrategicThrusts 41

03.5–UseofEduca'onalPathwaystoPromulgateKnowledgeonRe'rementIncomeandFinancialLiteracy

42

03.6–ProvisionofTrustedandIndependentInforma'ontoChangeBehaviour 66

03.7–WorkinginPartnershiptoStrengthentheConnec'onsbetweenallpartiesinvolved 69

Chapter04–RealisingtheNa7onalStrategyforRe7rementIncomeandFinancialLiteracy

04.1–FinancingtheNa'onalStrategyforRe'rementIncomeandFinancial Literacy 72

04.2–Implemen'ngtheNa'onalStrategyforRe'rementIncomeandFinancial Literacy 73

04.2.1:Implementa'on-2016 73



AnnexI-References 77


Oneoftherecommenda'onspresentedbythePensionStrategyGrouptoGovernmentinitsJune2015reportisthesebngupofaCommissionforRe'rementIncomeandFinancialLiteracy.Thisrecommenda'onwasposi'velymetinthefeedbackreceivedfollowingthena'onalconsulta'oncarriedoutin

thesummerof2015onthepensionreformrecommenda'ons.TheGovernmentagreesthatreformtothepensionsystemarchitecturealone,whilstacornerstoneofreform,isonlyoneaspectofthereformagenda.Asecondaspectofthereformagendaistoinculcateacultureforre'rementplanningandtonudgepeopletosave-butdosoinaninformedmanner.

Overthepastelevenyearssincena'onaldiscussiononpensionreformstartedinearnestfollowingthepublica'oninNovember2004ofthethenWhitePaper'tled‘Pensions–AdequateandSustainable:ReformsNeededNowtoEnsureAdequatePensionsforFutureGenera'ons’,wehaveseencon'nuouseffortsdirectedtonurtureacultureofplanningandknowledgewithregardtofinancialliteracyforre'rement.

Therearecommendableini'a'vesinthisregard.TheMaltaFinancialServicesAuthorityhasanexcellentknowledgebaseonwww.mymoneybox.mfsa.com.mt.TheMinistryofEduca'onandEmploymentinthenewNa'onalCurriculumFrameworkposi'onsfinancialliteracy,insubjectsincludingMathema'cs,HomeEconomicsandPersonal,SocialandCareerDevelopment,aswellasop'onbusinessrelatedsubjects;learningoutcomesforwhicharenowcompletedandwillcon'nuetoevolveasnecessary.TheSocialSecurityDepartment,withinmyMinistry,weekin,weekoutcarriesouteduca'onprogrammesonTVandradioonthesocialsecuritypension.Statutoryauthori'essuchastheMaltaStockExchangeaswellasfinancialservicesmarketprovidershavetakenanac'veroleinthepromulga'onoffinancialliteracy.

Yettheseini'a'ves,admirableastheyare,areuncoordinated.ItisforthisreasonthattheGovernment,ofwhichIformpart,willsetupaCommissionforRe'rementIncomeandFinancialLiteracy.TheformandmandateoftheCommissionwillbedecidedbyMinistryforFamilyandSocialSolidarity,

theMinistryforFinance,andtheMinistryforEduca'onandEmploymentfollowingtheconsulta'onprocess.

Itis,thus,mypleasure,topresentthedra$Na'onalStrategyforRe'rementIncomeandFinancialLiteracy.Thedra$strategytargetsthreepar'cularelements.ThefirstisKnowledge:ensuringthatpeopleunderstandwhatthesocialsecuritypensionincomeentails,howmarketsbehave,theassociatedrisksamongstotherssothattheycanmakeinformedfinancialdecisionsthatfittheircircumstances.ThesecondisPlanning:knowledgeallowspersonstounderstandhowtheirbehaviourinsavingorthefailuretosaveforre'rementeffectstheirqualityoflifeinre'rementandhowbesttoprepareforsuchlongtermsavings.ThethirdisAc'on:researchshowsthatpeoplearemyopicinplanninganddonotthinklongterm–theyareunlikelytosaveforre'rementwhenyoungandthatac'ontakenwhentheyareclosetore'rementisunlikelytosignificantlyposi'velyimpacttheirqualityoflifeinre'rement.Itisimportant,therefore,thatpeopleactearlyandindoingsoareequippedtomakebekerlong-termre'rementsavingsdecisions.

Thestrategyispresentedforpublicdiscussionandconsulta'on.Theworkinggroupwillengagewithbothpublicandprivateorganisa'onstoensurethatthereisna'onalbuy-intothisimportantstrategy:clearobjec'ves,keypriori'es,keymessagesandkeyac'onsthatweshouldcollec'velyworktowardstoandachieve.Itisimpera'vethatthisstrategybecomes‘our’strategy.TogetherwiththeMinistersforFinance,andEduca'onandEmploymen,welookforwardtoyourac'vepar'cipa'oninshapingourwayforwardonre'rementincomeandfinancialliteracy.

MichaelFarrugia|Minister

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http://www.mymoneybox.mfsa.com.mt


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Executive Summary


Theworkcarriedoutonpensionreformsince1997bydifferentgovernmentappointedworkinggroupsshowsthattheStatepensionislimitedtoensuringthatpensionersareabletoliveindignityonanadequatepension.Aspersonslivelongerandhaveafarhigherhealthylifeexpectancythanpensionersagenera'onago,theadequatelevelofincomethattheStatepensionprovideswillnotsufficetoallowthemtoleadthequalityoflifetheyenjoyedinpre-re'rement.

Ac'veageing,whichisresul'nginincreasinghigherlevelsof‘young’old(65yearsto69years)and‘old’(70yearsto74years)personsremainingac'veinthelabourmarket,maybridgetheirrespec've‘income’gapbetweenemploymentandre'rementincome.Thefact,however,remainsthatforpersonstoenjoyaqualityoflifeduringre'rementthatisequaltothatenjoyedinpre-re'rementtheyhavetoassumeresponsibilitytosaveenoughtoprovideforanincomeinre'rementoverandabovethatprovidedbytheStatepension.

Researchshowsthatnoreformofthepensionssystemaloneresultsinmeaningfulchangeunlessthisiscomplementedbytheinculca'onofacultureofself-responsibilityforre'rement–achievedthroughins'llingandunderstandingoftheimportanceofsavingforre'rement.

ThePensionsStrategyGroup(PSG)inthereportitpresentedtotheGovernment,andsubsequentlyplacedinthepublicdomainforna'onalconsulta'oninJune2015,statedthatitagreedwiththedirec'onproposedbythe2010PensionsWorkingGroup(PWG)onthesebngupofaCommissionthatisassignedresponsibilitytodesignandimplementare'rementincomeandfinancialliteracystrategy.

TheGovernmentacceptedthisrecommenda'on.Inlate2015theGovernmentsetuptheRe'rementIncomeandFinancialLiteracyCommissionundertheaegisoftheMinistryfortheFamilyandSocialSolidarity(MFSS).TheformandmandateoftheCommissionwillbedecidedbyMinistryforFamilyandSocialSolidarity,theMinistryforFinance,andtheMinistryforEduca'onandEmploymentfollowingtheconsulta'onprocess

Thisstrategyaddresses,primarily,akeyaspectinaperson’slifejourney:thebuildingofasavingsporpoliodirectedtoboosthis/herre'rementincomebeyondtheStatepension.Whilstnotwopersonshavethesamebehaviourwithregardtosaving,twoaspectsremainiden'calforthemajorityofpersons.

Thefirstrelatestotheunderstandingoftheimportanceofsavingforone’sre'rement.Researchoverseasshowsthatnotonlydoindividualsdisplaylowlevelsoffinancialliteracybutalsothatfinancialilliteracyislinkedtolackoffinancialplanningandinsufficientresourcesinre'rement–giventhatformanypersonsfinancialsecurityinre'rementdependsontheStatepension.Whatexplainsthislowlevelofre'rementpreparednessindevelopedcountries?Whydopeopledosopoorlywhenitcomestodesigningandcarryingoutre'rementsavingplans?

Thesecondrelatestosecuringfinancialliteracyandre'rementplanning.Thelevelsoffinancialliteracyamongstci'zensareaglobalconcern.Thecauseswhichtriggeredthe2008financialcrisisaremany.Thereis,however,likledoubtthatindividualsandfinancialins'tu'onsfailedtounderstandtheriskstheytookwhentheyinvestedinthefinancialmarket.Moreover,youngergenera'onsfaceincreasingfinancialrisksastheyareconfrontedwithmoresophis'catedfinancialproductsthanpreviousgenera'ons.Furthermore,theyaregivenaccesstofinancialservicesandproductsatanever-youngerage.Thesedevelopmentsdonotappeartobematchedbyanequivalentincreaseintheirfinancialskills.Improvingfinancialliteracyisanessen'almeanstowardsgreatereconomic,socialandfinancialinclusionandanintegralpartoffinancialreformtopreventfuturecrises.

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TheStrategyrecommendsthefollowingasavisionforthestrengtheningofthefinancialcapabilityofMalteseci'zenswithregardtore'rementincomeandfinancialliteracy:

“Improvingthepersonalfinancialwell-beingofMalteseci'zensduringlife-eventsandre'rementbyenablingthemtomakebekerinformedfinancialdecisionsthatfittheircircumstances”.

TheStrategyrecognisesskillsrelatedtore'rementincomeandfinancialliteracyasessen'allifeskills.ThevisionisunderpinnedbythefollowingprincipleswherebyMalteseci'zens:

• UnderstandhowtheStatepensionsystemworksandtheresul'ngre'rementincometheyreceiveasaresultoflifechoices;andhencetheyareinaposi'ontomakebekerinformedlife-'medecisions.

• Understandtheimportanceofsavingandinves'ngforone’sre'rement;and,thus,aremoreengagedtopreparefortheirre'rement.

• Understandbekerthanpreviousgenera'onstherangeofcomplexfinancialmanagementstrategiesencompassingmakerssuchasassetmanagement,taxandsuccessionplanning,andinsurance.

• Aremorecompetentonfinancialmarketsoperateandindecidingoninvestmentandsavingsproducts.

• Areawareoftheirrightsandprotec'onmechanismswheninves'ngorsavinginfinancialproducts.

Thestrategyproposesthattheseprinciplesareachievedthroughthefollowingthrusts:

• Usingofeduca'ontopromulgateknowledgeonre'rementincomeandfinancialliteracy.

• Providingtrustedandindependentinforma'onandundertakingofprogrammesdirectedtochangebehaviourandinculcateanewculturevis-à-vislongtermre'rementplanning.

• Workinginpartnershipstostrengthentheconnectionsbetweenallpartiesinvolvedinretirementincomeandfinancialliteracy.

Thestrategyrecommendsthefollowingactions:

Implementation: 2016 ACTION

THRUST1:EDUCATIONALPATHWAYS

A1 Ini'ateworkonaFinancialEduca'onFramework

A3

WorkwithparentorganisationsinthedesignoftheFinancialEducationFrameworktoidentifythemostsignificantteachablemomentsforchildrentofocusonretirementandfinancialliteracy.

A4Ini'atebuildingofasingleportalprovidingteachingresourcestoteachersinState,ChurchandIndependentschools.

B1

WorkwiththeG.F.AbelaJuniorCollege,ChurchandIndependentschoolsandexamina'onboardstoiden'fyappropriatemodel/sforstudentsandimplementasappropriate.

B2aWorkwiththeMaltaCollegeofArts,ScienceandTechnologytoiden'fyappropriatemodel/sforstudentsandimplementasappropriate.

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C1WorkwiththeUniversityofMaltaandotheruniversi'estoiden'fyappropriatemodel/sforstudentsandimplementasappropriate.

D2Partnerwithins'tu'onssuchasVISAtotapintotheirfreegame-basedfinancialeduca'onprogrammes.

D3Specificallytarget18-24agedyouthsonre'rementplanninggiventhesearealikelytargetshouldanautoma'cenrolmentpensionschemebeintroduced.

E2Designadultandcommunityfinancialeducationprogrammescoveringdifferentlife-cyclestages.

E3Teamupwithunionsandemployersandinitiateat-workfinancialeducationprogrammes.

E4TeamupwiththeLocalCouncilsAssociationandlocalcouncilsandinitiatecommunity-basedfinancialeducationprogrammes.

F1

WorkwithNGOstopromoteresearchtoincreasetheunderstandingofthediverseneedsofelderlypersonsforfinancialeduca'onandliteracy,andtheeffec'venessofdifferentapproachesthatcouldbeadopted.

F5Carryoutgeneralawarenessandeduca'onprogrammestarge'ngdifferentformsoffinancialabuseandbehaviouralchangesthatshouldbelookedoutfor.

ACTION

THRUST2:TRUSTED&INDEPENDENTINFORMATIONPROVIDER

G1Undertakeacomprehensivena'onalsurveyonre'rementincomeandfinancialliteracy.

H1Designa3-yearcommunica'ontarge'ngdifferentpopula'oncohorts.

H2 Implementiden'fiedtargetedcommunica'onscampaigns.

H3Designanevalua'onmechanismtogaugethesuccessofthecommunica'onsstrategy.

I1TogetherwithGovernmentandtheMFSAestablishaportaldesignedtoprovideofficialtrustworthy,mo'va'ngandaccessibleinforma'on.

J4

WorkwiththeDSS,MFSAandotherstakeholderstohelpensurethatpersonsareawareofandhaveaccesstoeffectivefinancialeducation,tools,informationandassistancerelatingtotheStatepension.

J5WorkwithGovernmentandcivilsocietytoestablishaprogrammethathelpsensurepensionersareawareandcanaccessGovernmentbenefitstheyareen'tledto.

ACTION

THRUST3:STRATEGICPARTNER

K1 WorkwiththeMFSAEduca'onConsulta'veCouncilonthedesignoftheFinancialEduca'onFramework.

K2EstablishaConsulta'veCouncildirectedtoinvolveabroaderspectrumofstakeholderssuchasemployeerepresenta'ves,employerrepresenta'ves,civilsociety,etc.

L2 Establishcontactswithsimilarorganisa'onsincountriesoverseastotapintotheirexperiencesandknowledgebase.

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Implementation: 2017 ACTION


F1 CompleteworkontheFinancialEduca'onFramework.

A3Ini'atepreparatoryworkwiththeMinistryforEduca'onandEmploymentforpar'cipa'oninthe2018PISAsurvey.

A4Con'nuewiththebuildingofasingleportalprovidingteachingresourcestoteachersinState,ChurchandIndependentschools.

A5Designandimplementaframeworkofhowtoassistschoolswiththepreparationandcontinuedprofessionaldevelopmentofteachersteachingfinancialeducation.

A6Workwithfinancialserviceprovidersfortheiden'fica'onofvoluntarysupportfromstaffandexpertsinsuppor'ngtheteachingoffinancialeduca'oninschools.

B2bWorkwithMCASTtoassessthepossibilityofintroducingNVQaccreditedprogrammesrelatedtofinancialeduca'onaspectsandiden'fyappropriatepathways.

D1

Workwiththefinancialsectorandstakeholderstointroduceandraiseawarenessofresourcesavailabletohelpchildrenandyouthprotectthemselvesfromfraud,scamsandiden'tythe$,etc.

D4 Con'nuetotarget18-24agedyouthsonre'rementplanning.

E2Con'nueimplemen'ngadultandcommunityfinancialeduca'onprogrammescoveringlife-cyclestages.

E3 Con'nuewithat-workfinancialeduca'onprogrammes.

E4 Con'nuewithcommunity-basedfinancialeduca'onprogrammes.

E5WorkwiththeEmploymentandTrainingCorpora'ontoembedre'rementincomeandfinancialliteracywithinexis'ngandnewtrainingprogrammes.

F2Workwithelderlypersons,aswellascaregivers,nurses,anddoctorstounderstandthepoten'alneedsrela'ngtomanagingfinancesforthosewhoexperiencesomelossofcogni'veability.

F3Workwithstakeholderswhoareuniquelyposi'onedtoiden'fyandredflagfinancialabuseamongsttheelderly.

ACTION

THRUST2:TRUSTED&INDEPENDENT

INFORMATIONPROVIDER

H2Con'nuetoimplementiden'fiedtargetedcommunica'onscampaigns.

J3WorkwithDSSsothatpeopleaccesson-lineastatementshowingcontributionspaidandtheprospectivepensionentitlement.

J6Introduceevaluationmechanismstogaugetheimpactofmeasuresintroduced.

ACTION

THRUST3:STRATEGICPARTNER L1

Par'cipateac'velyininterna'onaleventssuchastheInterna'onalForumforInvestorEduca'onandtheInterna'onalNetworkonFinancialEduca'on.

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Implementation: 2018ACTION


F1MapandcompletelinkingoftheFinancialEducationFrameworkwiththe learningoutcomesframeworkoftheNationalCurriculum.

A3 Par'cipateinthe2018PISAsurvey.

A4Con'nuewiththebuildingofasingleportalprovidingteachingresources toteachersinState,ChurchandIndependentschools.

A5Maintainandimprovetheframeworksupportingschoolswiththe professionaldevelopmentofteachersteachingfinancialeduca'on.

A7Work with the SEC examina'on boards to determine if andhow examinationques'onsinthecoreanddesignatedop'onalsubjectsshouldinclude financialeduca'on.

A8

Workwiththeuppersecondarycurriculumownerandappropriateexamina'onboardstodetermineifandhowexamina'onques'onsonfinancialeduca'onaretobeincorporated.

G1

Work with the financial sector and other relevantstakeholders to encouragethemtodevelopproductsthatareeasy tounderstandfor childrenandyouththatallows access aswell as encourages them tomanage their moneyresponsibly.



E4Con'nuewithcommunity-basedfinancialeduca'onprogrammes.

F4WorkwithNGOs,financialins'tu'onsandappropriateGovernmenten''esonadvocacyservicestobeprovidedtoelderlypersonsonfinancialabuse.

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APRR AveragePensionReplacementRate

BOV BankofValletta

CBM CentralBankofMalta

COHEAO Coali'onofHigherEduca'onAssistanceOrganisa'ons

DQSE DirectorateforQualityandStandardsinEduca'on

DSS DepartmentofSocialSecurity

ECC MFSAEduca'onConsul'veCouncil

HBS HouseholdBudgetarySurvey

HESC HomeEconomicsSeminarCentre

IFIE InternationalForumforInvestorEducation

INFE Interna'onalNetworkonFinancialEduca'on

LOF LearningOutcomesFramework

MATSEC MatriculationSecondaryExamination

MCAST MaltaCollegeofArt,ScienceandTechnology

MFSA MaltaFinancialServicesAuthority

MFSS MinistryfortheFamilyandSocialSolidarity

MIA MaltaInsuranceAssocia'on

MSE MaltaStockExchange

NCF Na'onalCurriculumFramework

NGO Non-GovernmentalOrganisa'ons

NSO Na'onalSta's'csOffice

PISA ProgrammeforInterna'onalStudentAssessment

PSG PensionsStrategyGroup

PWG PensionsWorkingGroup

OECD OrganisationforEconomicCooperationandDevelopment

SEC SecondaryEducationCertificate

SMarT SaveMoreTomorrowProgramme

UoM UniversityofMalta

NVQ NationalVocationalQualification

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Introduction Chapter 01


1.1 Background

Theworkcarriedoutonpensionreformsince1997bydifferentGovernment-appointedworkinggroupsshowsthattheStatepensionislimitedtoensuringthatpensionersareabletoliveindignityonanadequatepension.Aspersonslivelongerandhaveafarhigherhealthylifeexpectancythanpensionersagenera'onago,theadequatelevelofincomethattheStatepensionprovideswillnotsufficetoallowthemtoleadthequalityoflifeenjoyedinpre-re'rement.

Ac'veageing,resul'nginincreasinghigherlevelsof‘young’old(65yearsto69years)and‘old’(70yearsto74years)personsremainingac'veinthelabourmarket,maybridgetheirrespec've‘income’gapbetweenemploymentincomeandre'rementincome.Thefact,however,remainsthatforpersonstoenjoyaqualityoflifeduringre'rementequaltothatenjoyedinpre-re'rementtheyhavetoassumeresponsibilitytosaveenoughtoprovideforanincomeinre'rementoverandabovethatprovidedbyaStatepension.

Researchshowsthatnoreformofthepensionssystemaloneresultsinmeaningfulchangeunlessthisiscomplementedbytheinculca'onofacultureofself-responsibilityforre'rementachievedbyins'llinganunderstandingoftheimportanceofsavingforre'rement.

WithinthecontextofMaltathereistodaynostrategydirectedtowardsre'rementplanningandfinancialliteracy.Althoughpeopleinvestinfundsandshares,theprolifera'onofsavings,investmentandinsuranceproductsavailabletoconsumershaveincreasedthelevelofcomplexityfacedintryingtocomprehendthedifferentchoicesavailable.

Addi'onally,thereisaprolifera'onoffinancialproductsavailabletoconsumers,largelyspawnedbytechnologicaladvancesandderegula'onofthemarketforfinancialproductsandservices.Ofconcern,thenumberofcasesofmis-sellingoffinancialproductsbylocalfinancialins'tu'onsorpersonslosingsignificantsavingsthroughbadinvestmentdecisionsisontheincrease.

Alsodisconcer'ngis(asworkcarriedoutbytheDepartmentofSocialSecurityaswellaspreviouspensionreformgroupsshow)adis'nctabsenceofknowledgeofhowMalta’spensionsystemworksandhowthisimpactsaperson’sre'rementincome–anabsenceofknowledgethatcutsacrossallstrataofsociety.

The2010NewPensionsWorkingGroup(PWG)underlinedthattheabsenceofre'rementknowledgeandfinancialliteracywasaseriouslacunathatneededtobeaddressedwithinthecontextofpensionreform.The2010PWGproposed(Recommenda'on42)thatGovernmentshouldestablishanindependentpermanentCommissiononRe'rementIncomeandFinancialLiteracydirectedtoinculcateacultureofsavingforre'rementandtostrengthenfinancialliteracyacrosssociety.Thisrecommenda'onwasbasedontheunderstandingthatitwasclearthatinsecuringastructured,holis'candsustainedapproachtotheinculca'onofare'rementincomeandfinancialliteracyculturethescope,complexityanddura'onnecessarytoachievethisrequiredavehiclethatdrivesandsustainssuchalong-termini'a've.

TheCommissiononRe'rementIncomeandFinancialLiteracy(Commission)wassetupinJuly2012.

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ThetermsofreferenceoftheCommissionwereto:

• Createafinanciallyeducatedpopula'on.

• Raiseawarenessontheneedtoplanforre'rement.

• Provideeduca'ononfinancialmanagementandplanning.

• Designandembarkuponeduca'on,informa'onandknowledgecampaignstoassistpeopletomakeinformedfinancialchoicesanddecisionsfortheirre'rement.

• Buildandfosteranetworkforfinancialliteracyprovision.

• Collectresearchonre'rementplanningbehaviourandabtudes.

• RecommendtoGovernmentstrategiestoinculcateacultureofsavingsforre'rement.

TheCommissionwascons'tutedofaChairmanandholdersofthefollowingoffices:

• Chairman,MaltaFinancialServicesAuthority(MFSA).

• Chair,2010NewPensionsWorkingGroup.

• President,MaltaInsuranceAssocia'on(MIA).

• DirectorGeneral,DepartmentofSocialSecurity.

• DirectorGeneral,DirectorateforQualityandStandardsinEduca'on(DQSE).

• Dean,FacultyofEconomics,ManagementandAccountancy.

• Chairperson,PrivateSchools’Associa'ons.

• President,Na'onalCouncilofWomen.

• President,Ins'tuteforFinancialServices.

• Chairman,MaltaCouncilforEconomicandSocialDevelopment.

• Chairman,MaltaBankers’Associa'on.

Inaninterviewwith‘TheTimesofMalta’heldsoona$erthecons'tu'onoftheCommission,thethenChairmanstatedthat“’financialliteracy’isthepossessionofknowledgeandunderstandingoffinancemakers[andthat]thetermisnormallyusedinconnec'onwithpersonalfinancemakerssuchasrealestate,insurance,inves'ng,saving,taxplanning,andre'rement.” 1

TheChairmanemphasisedthat:

“theabsenceoffinancialliteracycanleadindividualstomakingpoorfinancialdecisionsthatcanhaveadverseeffectsontheirfinancialhealth,re'rementdecisionsareo$enconsideredtobetoocomplexforindividualstosolveontheirownpar'cularlyasmanyindividualsmayhavelowfinancialcapability…[resul'ngin]notfullyunderstandingwhattheyexpecttoreceivefrom[the]Statepensionprovision,norhowmuchaddi'onalre'rementsavingisneededtoensureanadequatelevelofincomeinre'rement.” 2

TheCommissionwastaskedtocompletebytheendof2012(i)abaselinesurveytoassesstheleveloffinancialliteracyinMalta;and(ii)ana'onalstrategyforfinancialliteracyandre'rementincome.TheCommissionwhilstadvancedinthesetasksdidnotcompletethem,asitwasnotre-cons'tutedfollowingthechangeofadministra'oninMarch2013.

Ripard,J, ‘InterviewwiththeChairmanoftheCommissiononFinancialLiteracyandRe'rementIncome’,TheTimesofMalta,1

2012

Ibid2

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1.2 Recommendations Proposed by the Pensions Strategy Group

Thereislikledoubtthatlong-termsuccessfulimpactresultingfrompensionsreformcanonlybeakained througheduca'on,knowledgeandinforma'onthattranscendsacrosstheMaltesepolity–star'ngfrom primaryeduca'ontoemployment.

In the terms of reference assigned to the Pensions StrategyGroup(PSG)bythenewadministra'on in July 2013,theMinistry for the FamilyandSocialSolidarity(MFSS)taskedtheGroupto:

“Developacommunica'onsstrategydirectedtowardraisingthelevelofpublicawarenessonpensionissuesinMaltaandtheneedtoensurethatfuturepensionincomesareadequateinordertosustainahighstandardoflivinginre'rement.”

ThePSGinthereportpresentedtoGovernmentinJune2015,andsubsequentlyplacedinthepublicdomainforna'onalconsulta'on,statedthatitagreedwiththedirec'onproposedbythe2010PWGvis-à-visthesebngupofaCommissionforRe'rementIncomeandFinancialLiteracy.ThePSGproposedthatthe‘firstandimmediatetasks’ofanewlyset-upCommissionshouldbetheundertakingofafinancialliteracysurveyonthebasisofwhichaNa'onalStrategyisdesigned.ThePSGproposedastermsofreference:

• Theuseofeduca'ontopromulgateknowledgeonre'rementincomeandfinancialliteracy.

• Theprovisionof trustedandindependentinforma'onandundertakingofprogrammesdirected tochangebehaviourandinculcateanewculturevis-à-vislong-termre'rementplanning.

• Workinginpartnershipstostrengthentheconnec'onsbetweenallstakeholdersinvolvedinre'rementincome andfinancialliteracy.

Theconsulta'onfeedbackonthereportofthePSGbybothcons'tutedbodiesandthegeneralpublicshowedthatthereisunanimousagreementwiththesebngupofsuchavehicle.ThePSG’srecommenda'onwasseenasanimportantmeasuredirectedtostrengthenself-responsibilitytoprepareforre'rement.

ThepreviousCommissioncons'tutedoftwelvemembersincludingthechairpersonwastopheavy.InthesubmissionofitsfinalreporttoGovernmentfollowingtheanalysisoftheconsulta'onfeedbackthePSGproposedthesebngupofasmallerCommissionopera'ngundertheaegisofMFSS.TheformandmandateoftheCommissionwillbedecidedbyMinistryforFamilyandSocialSolidarity,theMinistryforFinance,andtheMinistryforEduca'onandEmploymentfollowingtheconsulta'onprocess

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1.3 A Draft National Strategy for Income and Financial Literacy: Knowledge, Planning, Action

Thedra$na'onalstrategyisdividedinfourparts.Theseare:

Introduc*on Thispartsetsthebackgroundandthecontextontheneedfor anational strategyfor retirement incomeand financial literacyand the Commissionasavehicletoimplementsuchastrategy.

UnderstandingRetirementIncome&FinancialLiteracy

Thispartprovidesinformationonthekeyissuesthatrelatetoretirement incomeandfinancialliteracy.Inthedraftingofthispartextensiveuseis madeofresearchcarriedoutbyMaltesestudentsintheirBachelor andMastersdissertations thatshed interesting lightonthestateofplay.

StrategicMeasureswithregardtoRe*rementIncomeandFinancialLiteracy

Thispartreviewsthethreeprongsofthestrategy–educationpathways; trustedand independent information and programmes to inculcate a saving culture;and the fostering of partnerships – and recommends measureswithregardtoeachprong.

NextStepsThispartrecommendsatimeframefortheimplementationofthe proposedmeasures as well as recommendations to the resourcingandfinancingoftheCommission.

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Understanding Retirement Income

and Financial Literacy Chapter 02


Thisstrategyaddressesakeyaspectinaperson’slifejourney:thebuildingofasavingsand/orinvestmentportfoliodirectedtoboosthisorherretirementincomebeyondtheStatepension.Whilstnotwopersonshavethesamebehaviourwithregardtosavingand/orinvestingtwoaspectsremainidenticalforthemajorityofpersons.Thesearediscussedbelow.

2.1 Understanding the Importance of Saving and / or Investing for one’s Retirement

Thefirstrelatestotheunderstandingoftheimportanceofsavingand/orinves'ngforone’sre'rement.Researchfrommanycountriesshowsthatnotonlyindividualsdisplaylowlevelsoffinancialliteracybutalsothatfinancialilliteracyislinkedtolackoffinancialplanningandinsufficientresourcesinre'rement–giventhatformanypersons,financialsecurityinre'rementdependsontheStatepension. Whatexplainsthislowlevelofre'rement3

preparednessindevelopedcountries?Whydopeopledosopoorlywhenitcomestodesigningandcarryingoutre'rementsavingplans?

Figure 01: The Retirement Landscape

Pg 2, Boisclaire, D., Lusardi, A., and Micaud, PC., Financial Literacy and Retirement Planning in Canada, Scientific Series, CIRANO,2014s-35,3

Montreal,2014

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Researchrepeatedlyshowsthattherearesignificantgapsinknowledgeaboutre'rement: 4

• Manypeoplearefocusedontheshorttermastheyplanforre'rement.Re'rementplanning,tooo$en,doesnotincludeaseriousanddeliberateanalysisoflifeandfinancialissues.

• Whenplanningforre'rementmanypeople(andprofessionaladvisers)limittheirfocustoinvestmentmanagement.

• Thereissignificantmisunderstandingaboutpoten'allifespansandtheirvariability.Manyoveres'matetheamountthatcanbesafelywithdrawnfromare'rementaccount.Theyalsoconsideronlyaverageinvestmentreturnswithoutweighingthedownsideriskandresultsiftherearepooryears.

• AsthelifeexpectancyofMaltesecitizenscontinuestoincrease,theriskthatpensionersoutlivetheirfinancialassetsisasignificantgrowingchallenge.

• Manypeopleareoverop'mis'caboutexpectedreturnsonsavingsandinvestmentsandtheirabilitytomanagesuchsavingsandinvestments.

• Thereareshortcomings,par'cularlywithregardtoeduca'ngpeopleonhowtheStatepensionworks,theexpectedlevelofincomeinre'rementfromaStatepensionbecauseoflifechoices,etc.

Whatconstitutes‘enough’re'rementincome? Re'rementincomeadequacymaybedefinedrela'vetoa standardofminimumneeds,suchasthepovertyrate. Alternatively,itmaybedefinedtorepresentthe levelofspendinghouseholdsexperiencedduringworkingyears. Someeconomistsconsiderre'rement incomeadequateifthera'oofre'rementincometopre-re'rementincomethereplacementrateis between65to85percent. 5

It is arguedbysomethat retirees donotneedtoreplace100 percent ofthepre-retirement income to maintainstandards as spending profilesof elderlypersons change for example, they no longer need to investintheirchildren’seducation orpayoffthemortgage. InMalta’s case significant in-kindbenefitsare provided by thegovernment to elderly persons such as health care,community careandlong-termcare.

DO YOU KNOW? 90.1% of persons in Malta who are concerned about their retirement savings believe that there is no market awareness on early retirement planning. The same levels of concern are expressed with by those who answered that they have no concerns or are not sure with regard to their retirement savings. Source:T,Galea.,AnalysingRetirementPlanningandAwarenessamongtheFutureWorkingGeneration,UniversityofMalta

Lusardi, A., andMitchell, S,O., Financial Literacy andPlanning: Implications for RetirementWellbeing, Retirement Research Consortium,20054

Pg9,UnitedStatesGovernmentAccountabilityOffice,RetirementIncome:EnsuringIncomethroughRetirementRequiresDifficult Choices,Report5

totheChairman,SpecialCommitteeonAgeing,U.S.Senate,2011.

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Yetpeoplearenotonlylivinglongerthanpreviousgenera'onsbutaresignificantlyfarhealthierandleadingmoreac'velives.Indeed,thereisanexpecta'onamongstpensionersinthe‘youngold’(65yearsto69years)andthe‘old(70yearsto74years)categoriesforanenhancedqualityoflife.The2015PSGproposedreformsinthepensionsystemprojectedanAveragePensionReplacementRate (APRR)of45%forcertaincohortsofthepopulation6

significantlylowerthantheirre-retirementincome.

Thus,ensuringthatanindividualhasthenecessarylevel of income during retirement demands acomprehensionofthevalueoftheStatepensionincomeonretirementandhowthiscompareswiththequalityoflifethatpersonseeksinretirement.

Thisnecessitatesanunderstandingofhowthepensionsystemworksandhow savingandinvestment behaviourduringone’sworkinglifecanimpact,posi'velyornegatively,one’spensionincome.

ThepensionreformscarriedouttodayinMaltasoughttosafeguardthatthelevelofthereplacementra'ofortheStatepensionincomeduringre'rementwouldbesuchthatitprovidesadequacyand,hence,dignity,duringre'rement.Whatthismeans,ofcourse,isthattheincomefromtheStatepensionalonewill,par'cularlyforpersonsinlowertomiddleincomecategories,definitelynotbeequaltotheincomereceivedduringemployment.

SurveyscarriedoutbytheNa'onalStatisticsOffice(NSO)onbehalfofboththe2004and2010PWGs showedthat to the majority of households the State pension cons'tuted the founda'onofincomeinre'rement. Thereis,therefore,adegreeofcertainty,thatpersonswhodecide(ac'velyorpassively) that their main incomeduring re'rement will derive from the State pension face a gap betweentheincomereceivedduringemploymentandtheincometheywillreceiveinre'rement–agap, which,unlessplannedfor,islikelytoresultinasignificantimpactontheirqualityoflifeduringre'rement.

DO YOU KNOW? 64.0% of persons in Malta do not give any thought to the level of savings they should have given their desired retirement age and life expectancy; although 70% of respondents state that the State pension would only provide sufficient income to pay for bare necessities. Additionally of those (6.5%) who ponder about the level of income they seek in retirement 52.4% state that they require the same level as pre-retirement income whilst 9.5% stated that they do not know.

Source:T,Galea.,AnalysingRetirementPlanningandAwarenessamongtheFutureWorkingGeneration,UniversityofMalta

TheAveragePensionReplacementRateisvalueofthepensionincomeatanypointin'meinrela'ontotheaveragewage.6

*Theunder-graduateresearcher’ssurveyissimilarlystructuredtoothersusedinthisareaof researchmostnotablythosecarriedoutbytheOECDandthe INFE. Thepopula'on sample is notna'onally representa'veas it is limited toFacebook, the General Retailers and Traders Union, theNa'onalCouncilofWomenandUniversityof Maltastaffandstudents.

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DO YOU KNOW? Most of the respondents in a survey on financial literacy do not hold a specific savings plan for retirement. Those who do invest approximately €1,161 annually - €97 per month.* Source:Mangion,A.,AnAnalysisofFinancialLiteracyinMalta,UniversityofMalta,May2015


The average employed person has a number of events in their life- cycle that have a profound impactwithregardtotheirfuturedevelopmentoftheirwealthassets. Thetablebelow,basedondata from the2008Household BudgetarySurvey (HBS), presents a life cycle for an averageperson.The averagepersonisunlikelytosaveforre'rementintheiryouth–otherthantobuyacar,travel,or perhapstopartfinancepost-graduatestudies.Largely,asisdiscussedlater,thisisthe result of the fact that young people do not makepro-active decisions about their future – a result of counteringbehaviour-limi'ngissuessuchasmyopiaorinertia.

Persons in the23 to34age cohort are likely tohaveentered into loans topurchaseand furnish their futurehome(peopleinMaltaaremorelikelytoownahomethenrent,withhomeownershipin2014standingatover76%) and havemost likelymade the decision to raise a family. The 35 to 45 and the 45 to 54 age cohortsrespec'velyarelikelytohaveinvestedinbringinguptheirchildrenandinpayingoffthemortgage.Asthe2008HBSdata shows, it is at this stage,once themortgage ispaidoffand thechildren secured theirown incomestreams,thatahouseholdhastheopportunitytostartaccumula'ngwealth(otherthantheirresiden'alhome).

Figure 02: Savings Life Cycle of an Average Maltese Household 7

Uponretirement,incomedecreasesandwhilsthouseholdpatternschange,theabilitytoliveaqualityoflifesimilartothatwhilstinemploymentdecreasesaswell.Theaboveshowsthat,withinthelifecycleofanaverageperson,thereisonlyalimitedperiodof10yearswhere,apartfromtheinvestmentinthehomeasset,thatpersonorhouseholdstartstoaccumulatewealthinfinancialassets.

DO YOU KNOW? 76.3% of households in Malta do not save. Only 23.7% of households are net savers with a median annual savings amount of €3,000 and an average saving level of €4,444.Source:(Caruana,K.,andPace,C.,HouseholdFinanceandConsumptionSurveyinMalta,2013,CentralBankofMalta)

HouseholdBudgetarySurvey2008,NationalStatisticsOffice,Malta,20107

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This,however,maybetooshortaperiodtoallowapersontobridgethegapbetweenre'rementincomeandincomeinemploymenttoallowthemtoretainaqualityoflifeinre'rementequalorneartothatwhilstinemployment.

The2015pensionreformsrecommendmechanismsdirectedtoincen'visepersonstodeferordelaytheirreceiptoftheStatepension,inordertoincreasetheirStatepensionincome.Notallpersonsaged66to70years,however,wouldbenefitfromtheopportunityofdelayingtheirpensiontoincreasethere'rementincome(intheeventthatthePSG’srecommenda'onsinthisregardareembracedbytheGovernment).Thisisbecausethemandatoryre'rementageinMaltais65yearsofage.Beyondthisage,furtheremploymentwithone’semployerisdependentontheemployer’sconsent.

Addi'onally,theincidenceofpersonssufferingfromelderlyrelatedhealthcondi'onsislikelytoincreaseasapersonagesanditislikelythatacohortofpersonsmay,duetohealthrelatedmakers,nottriggerthisop'onevenifcon'nuedemploymentwaspossible.

Moreover,thereisalsothefactorofriskswhichwithregardtore'rementarecomplexandinterac'ng.Transferableandpoolablerisksincludeincreasinglongevity,thecostofdisabilityandlong-termcare,thecostofacutehealthcare,economiclossfollowingthedeathofaspouse,andinvestmentandinterestraterisk.Risksthatcannotbetransferredorpooledincludedifficul'esinfindingajob,earlyre'rement,familymembersneedinghelp,andaspectsofinfla'on.Anumberofrisksthataffectsavingsforre'rementarediscussedbelow.

Thefirstislifeexpectancy.ThelifeexpectancyofMaltesepersonscon'nuestoincreaseover'me.Asaresult,re'rementlastsmuchlongerthanitusedto.Theinherentriskisthatsomepeoplecouldendupunderes'ma'ngtheirownlifeexpectancyandthereforeoutlivetheircapital.Withtheremarkableadvancesinmodernmedicine,combinedwiththefactthatmoreandmoreMaltesearepayingcloseraken'ontotheirhealth(bekerea'ng,sleepingandexercisehabits),theaveragelifeexpectancyshouldcon'nuetoreachnewheights.Inotherwords,re'rementwillnolongerbe14years(asisthecaseforamaletodayifhere'resattheageof65years)-butonethatexceeds20years.

Whatthisalsomeansisthatitisriskyforapersontobasetheirde-accumula'onstrategyinre'rementontheassump'onthattheywillliveforexactlyaslongastheirlifeexpectancy.Thisisbecausewhilstone’slifeexpectancyisknown,orthoughttobeknown,aperson’sactuallongevityisnot.Thusifthepersonliveslongerthanexpectedthatpersonrunstheriskofrunningoutofsavingswiththesubsequentimpactontheirstandardofliving.

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DO YOU KNOW?

Potential Life-Cycle Events

- Continuing with further and higher education Starting work

- Buying a car - Setting up a new home - Getting married - Having children Getting a pet - Losing a job - Starting a business - Planning for retirement - Getting separated or divorced - Being victimised by fraud - Inheriting money - Coping with illness or disability - Dealing with death - Caring for a loved one - Living one's retirement


Figure 03: Life Expectancy of Maltese Males and Females between 1960 and 2060

Thesecondissueisinfla'on.Infla'onrepresentsthegeneralincreaseinthepriceofgoodsandservicesovertheyears,whichendsupaffec'ngaperson’spurchasingpower.Theaverageinfla'onrateinMaltabetween1990and2014was2.51%.‑ Amodestinfla'onrate,therefore,canresultinadentinpurchasingpower.Forthosewhoare8alreadyre'red,infla'onrunstheriskofsignificantlycompromisingthelongevityoftheircapital.

Thethird issuerelatestothequalityof lifeapersondesiresinretirementand there'rement income requiredtomaintainsuchalife.Apersonwhore'redin2015receivedamaximumpensionof2/3of€17,842 :€11,894.79

annuallyor€228.7weekly.

DO YOU KNOW? In 1960 the life expectancy of a Maltese male was 66 years and that of a Maltese female slightly over 70 years. Today, the life expectancy of male is 79 years whilst that of a female is 84 years.

If you are 50 years today and you are a male your life expectancy will likely be 82 years and if you are a female it will likely be 87 years.

DO YOU KNOW? A loaf of Maltese bread of 500g in 1992 cost €0.16. In July 2015, a similar loaf of bread cost €0.92. This is 5.75 times more than a loaf of bread cost 23 years ago.Source:Bellizi,M.,ChangingEatingHabitsoftheMaltese,andFoodPricesinMalta(http://www.numbeo.com/food-prices/country_result.jsp?country=Malta)

DO YOU KNOW? http://nso.gov.mt/en/nso/Selected_Indicators/Retail_Price_Index/Pages/Index-of-Inflation.aspx8

http://www.msvlife.com/products/retirement/your-state-pension-explainedents.9

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http://nso.gov.mt/en/nso/Selected_Indicators/Retail_Price_Index/Pages/Index-of-Inflation.aspx

http://www.numbeo.com/food-prices/country_result.jsp?country=Malta

http://www.numbeo.com/food-prices/country_result.jsp?country=Malta

http://www.msvlife.com/products/retirement/your-state-pension-explained


Thetablebelowpresentsexamplesofadditionalincomethatapersonwhoretirestodaywouldrequiretomaintain astandardoflivingthatisequaltothatenjoyedwhilstinemployment.

Table 01: Additional Annual Income Required over and above Pension Income to Maintain Quality of Life Enjoyed whilst in Employment

Ascanbeseenfromtheabovetable,apersonwhoearns€20,000andretiresin2015requiresanadditional€8,105annuallyoverandabovetheannualpensionincomeof€11,895–thatis,themaximumpensionableincomepossible-tomaintainthesamequalityoflifeduringretirementasthatenjoyedwhilstinemployment.Tomaintainaqualityoflifethatisequalto75%ofthatenjoyedwhilstinemploymentsuchapersonrequiresanadditionalannualincomeof€3,105.

Table 02: Additional Annual Income Required over and above Pension Income to Maintain 75% of Quality of Life Enjoyed whilst in Employment

AsurveycarriedoutbytheCentralBankofMalta(CBM)showsthatmorethan97%ofhouseholdsownatleastonefinancialasset,andfinancialassetsrepresented13.4%oftotalassets.Themostwidelyheldfinancialassetisaninterestbearingdepositwithabank,withalmost83%ofhouseholdsholdingthistypeofasset. 10

Addi*onalIncomeRequired

5,000 5,947 8,105 18,105 28,105 38,105 48,105 58,105 68,105

Pension 10,000 11,895 11,895 11,895 11,895 11,895 11,895 11,895 11,895

AnnualSalary 15,000 17,842 20,000 30,000 40,000 50,000 60,000 70,000 80,000

Addi*onalIncomeRequired

1,250 1,486 3,105 10,605 18,105 25,605 33,105 40,605 48,105

Pension 10,000 11,895 11,895 11,895 11,895 11,895 11,895 11,895 11,895

75%ofAnnualSalary 11,250 13,381 15,000 22,500 30,000 37,500 45,000 52,500 60,000

DO YOU KNOW? If you earn a salary of €30,000 annually and retired in 2015 you require an additional €10,605 and €18,105 annually to maintain a quality of life in retirement that is equal to 75% and 100% as that enjoyed in employment.

Pg10,Caruana,K.,andPace,C.,HouseholdFinanceandConsumptionSurveyinMalta,2013,CentralBankofMalta10

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Non-interestbearingaccounts(thatiscurrentaccounts)areheldby74.3%ofhouseholds,while21.6%ownsomeformofdebtsecurity,mainlycorporatebondsandgovernmentsecuri'es.EquityintheMaltaStockExchange(MSE)orelsewhereisheldby13.4%ofallhouseholds,while8%ownmutualfunds.Furthermore,thesurveyshowsthat24.2%ofallhouseholdsarecoveredbyalifeinsurancepolicyorpar'cipatedinare'rementscheme. 11

In2010theNSO,onbehalfofthethenPWG,carriedoutasurveyonpercep'onswithregardtopensionsandre'rement.Thesurveyfoundthat70%oftherespondentsstatedthatthemainincomeduringre'rementistheStatepensionandthat56.2%fearedthattheincomefrompensionsandinvestmentswouldnotbesufficientforthemtolivecomfortablyduringre'rement. 12

Thefourthissueisthemanagementofsavings.TheCBMsurveymen'onedearliershowsthatthemedianvalueofholdingsoffinancialassetsises'matedat€26,229–withfinancialassetsincludingnon-interestbearingdeposits;interestbearingdeposits;mutualfunds;securi'es;listedshares;andvoluntarypensionschemesandlifeinsurance. 13

Themanagementofsavingstosecurethehighestrateofreturniscri'cal–par'cularlyinastateofplaywhereinterestratesinbanksonsavingdepositswithintheEuroZonearelow.Thefigurebelowdepictstheaccumula'onofsavingscapitalatdifferentinterestratesbyahouseholdthatfromtheageof35yearsinvests€500annuallyforre'rement.Thetotalinvestmentovera30-yearperiodis€15,500.

Inves'ngsuchcapitalinanormalsavingsaccount,withaninterestrateof0.1%resultsinanaccumulatedinterestof€234.80.Thisleadstoanerosionofthepurchasingpowerofthisinvestmentintheeventofanaverage2.0%infla'onrateoverthe30-yearperiod.Ontheotherhand,inves'ngsuchcapitalinasavingsaccountof3.0%resultsinanaccumulatedinterestof€9,501.30.

Figure 04: Annual Investment of €500 over a 30 year Period under different Interest Rates

DO YOU KNOW? A survey carried out in 2010 by the NSO on behalf of the PWG shows that:

Ques*on 18-24Years 21-34Years 35-54Years 55-63Years Total

TotalIncomefromPensionsandotherinvestmentisNOTenoughtolivecomfortably

44.4% 59.3% 58.9% 62.1% 56.2%Employed Unemployed Inac*ve Total56.2% 60.0% 55.1% 56.2%

NoSchooling Secondary Post-Secondary Ter*ary Total

57.9% 59.5% 55.8% 49.6% 56.2%Married NotMarried Total59.4% 52.2% 56.2%SouthernHarbour

NorthernHarbour

SouthEastern Western North GozoandComino

60.8% 54.1% 56.9% 46.8% 59.0% 56.2%Males Females Total57.4% 54.3% 56.2%

Pg10,Ibid11

Pp 14-16, The Public Perception of the Pensions System, Supplementary Paper Number 02, National Statistics Office, New PensionsWorking12

Group,2010


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�

Thefifthissueistherateofsavingswithdrawal. TheaforementionedCBMsurveyshowsthatthe median financialasset holdings for retiredpersons (estimated to be 27%of all households) stood at€28,906 .Toomany14

withdrawalsorhigh levelsofwithdrawals,however, can seriouslycompromisethelongevityofone’ssavings. Thefigurebelowshowstheimpactofdifferentannual savings withdrawal scenarios – 15%, 10% and 5% on assets,which are held in savings and other financialassessments. A savingsinterestrateof1.1%isfactored .15

Are'redpersonwhowithdraws15%annuallyfromhis/hersavingscapitaldepleteshis/hersavingscapitaltobelow€1,000bythe'mes/heis86years.Awithdrawalrateof5%savingsannually,ontheotherhand,resultsinretainingsavingsofslightlybelow€10,000attheageof86years.

Figure 05: Projection of Capital Longevity on Different Withdrawal Rates

DO YOU KNOW? If you invest €500 annually between 35 to 65 years of age in a normal savings account with an interest rate of 0.1%, your €15,500 capital will increase to €15,734.80. On the other hand, if you invest the same capital in a savings account with an annual 3.0% interest rate return, your capital increases to €25,001.34.

DO YOU KNOW? According to the Central Bank Malta survey carried out in 2013 the median financial asset holdings for retired persons in 2010 stood at €28,906. If a person on reaching 65 years withdraws 15% a year from his/her savings of €28,906, by the age of 86 years the savings will fall to €952.

Ibid14

hkp://malta.deposits.org/15

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�

TheCBMSurveyshowsthat34.1%ofallhouseholds,havesometypeofdomes'cdebt liabilitythataverages€35,814perhousehold.25.2%ofhouseholdshaveoutstandingconsumercreditfacili'estofinancesome formofconsump'onexpenditureviacreditcards,overdra$sandotherconsumer/private loans. Forall households, theoverall debt value amounts to just 3.2%of gross households’wealth inMalta. 16

TheSurveyestimatesthattheamountofdebtservicing(thatisoncollateralisedloans and on consumer/privateloans)made by householdsstands at 11% inmedian terms .Almost16%ofhouseholdshaveanoutstanding17

bank loantofinancethepurchaseoftheirmainresidenceorotherrealestateproperty.Thisisaresultofthefactthatwhen comparedtootherEUcountries,Maltahasahighrateofhomeownership. 76.4%of personsinMaltaown(freeholdandgroundrent)theirhome . 18

Onaverage,theinitialamountborrowedbyhouseholdsapproximates€63,560andtheaveragerepaymentperiodis26.5years.Theeffectiveinterestratepaidbyhouseholdsonhomeloansis4.1%,whilethemonthlydebtrepaymentaverages€296.Theaverageamountstillowedbyhouseholdstothebanksstandsat€44,003.

The2011censusshowsthatthereare152,770occupieddwellings–anincreaseof13,592and33,291dwellingsonthe2005and1995respec'vecensusbaselines.Homeownership–freeholdaswellasgroundrent–increasedconsiderablyintermsofnumberofdwellingsonthe2005baselineby12,183dwellingsor11.4%on2005.

Table 03: Occupied Dwellings by Ownership 19


Ibid17

CensusofPopula'onandHousing2011,FinalReport,Na'onalSta's'csOffice,Malta,201418

Table95,CensusofPopula'onandHousing2011,FinalReport,Na'onalSta's'csOffice,Malta,201419

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Thelargestcategoriesofoccupieddwellingsare :20

• Terracedhouses/townhouses:34.7%oftotalstock–ofwhich,86.1%areprivatelyowned.

• Flats/apartments/penthouses:29.4%oftotalstock–ofwhich,62.0%areprivatelyowned.

• Maisonekes/groundfloortenements:28.9%oftotalstock–ofwhich,77.2%areprivatelyowned.

Moreover :21

• 72.6%and20.3%ofterracedhouses/townhousesareinagoodstateandinneedofminorrepairs.

• 79.0%and16.6%offlats/apartments/penthousesareinagoodstateandinneedofminorrepairs.

• 77.9%and17.0%ofsemi-detacheddwellingsareinagoodstateandinneedofminorrepairs.

• 73.0%and20.1%ofmaisonekes/groundfloortenementsareinagoodstateandinneedofminorrepairs.

• 72.9%and21.0%offullydetacheddwellingsareinagoodstateandinneedofminorrepairs.

• 49.1%and31.0%offarmhousesareinagoodstateandinneedofminorrepairs.

Ofthetotaldwellingsthatareinagoodstateofrepair,80.5%areprivatelyowned. Furthermore,11,511 personsownfreeholdorwithgroundrentholidaydwellings .Thishighlevelofpropertyownershipin Maltameansthat22

theaveragepersonislikelytobeassetrichbutcashpoor.Nevertheless,italsoprovides anopportunitywhere,withinaregulatedenvironment,peoplemaywishtoconvertthehomecapitalassetintoincomeforretirementandindoingsocomplementtheStatepensionandotherfinancialassets.

Improvingpersons’financial literacy, therefore, is one important component inhelping themplanandsubsequentlymanagere'rement incomeappropriately. Ensuringthefinancial literacyofolderpeople is of

1995 % 2005 % 2011 %

OwnedFreehold 81,242 68.0 76,689 55.1 92,281 60.4

Ownedwithgroundrent 27,922 20.1 24,513 16.0

Rentfurnished 30,824 25.8 24,383 17.5 22,351 14.6

Rentedfurnished 2,957 2.5 4,377 3.1 7,994 5.2

Heldbyemphyteusis 2,112 1.5 1,438 0.9

Non-respondent 4,407 3.7 3,695 2.7 4,193 2.7

DO YOU KNOW? According to the 2011 Malta Census 49.6% of persons aged between 66 and 75 years; 56.1% of persons aged between 76 and 85 years; and 43.1% of persons aged 86+ own a home. Source:CensusofPopulationandHousing2011,FinalReport,NationalStatisticsOffice,Malta,2014

Ibid20

Table96,Ibid21

Table132,Ibid22

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significant importance given the increasing responsibility of individuals tocomplementandmanage their assetsinre'rement.

DO YOU KNOW? A Home Revision Scheme is a scheme where a financial institution buys your residential home and allows you to continue to live in your home. Say, for example, that you are 70 years old and that you own a house that is worth €200,000. A financial institution makes you an offer to buy between 30% to 90% of your home. The financial institution offers you the following:

Percentage to be Acquired (%) Cash Released(€)

90 89,975

70 69,980

50 49,986

30 29,992

The company does not offer you the market value for the acquisition of 90% of the home. This is because you and your spouse will continue to live in and enjoy your home until both of you pass away. You decide to release 90% of your family home to the company. This provides you with an immediate income injection of €89,975. To carry out this transaction, you are likely to pay legal fees, brokers’ fees, architect fees, amongst others.

You and your wife live for another 15 years. By the time the house is sold its value increases to €250,000 – by €50,000. Your successors will only be entitled to 10% of the new valuation received when the sale of the home is made - €5,000. This reflects the 10% share that you and your spouse retained in your home.Source:ResearchintotheFutureHousingandSupportNeedsofOlderPeople-ScopingStudy:AssessmentofthePotentialofEquityReleaseforOlderOwnerOccupiers,FionaBoyleAssociates,NorthernIrelandHousingExecutive,October2010

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2.2 Securing Financial Literacy and Retirement Planning

Thelevelsoffinancialliteracyamongstcitizensisaglobalconcern.Thecausesthattriggeredthe2008financialcrisisaremany,butthereislittledoubtthatindividualsandfinancialinstitutionsfailedtounderstandtheriskstheytookwhentheyinvested/savedinthefinancialmarket.

Moreover, younger generations face increasing financial risks, and are confronted with more sophisticatedfinancialproductsthandidpreviousgenerations. Furthermore, theyobtainaccessto financialservicesandproductsatanever-youngerage. Thesedevelopments,however,donotappearto bematchedbyanequivalentincreaseintheirfinancialskills.

Improvingfinancialliteracyisanessentialmeanstowardsgreatereconomic,socialandfinancialinclusionandanintegralpartoffinancialreformtopreventfuturecrises.Backin2002,recognisingthenegativeconsequencesofalackoffinancialliteracy,theOrganisationforEconomicCooperationandDevelopment(OECD)establishedacomprehensiveprojectonfinancialeducation.In2008,theOECDInternationalNetworkonFinancialEducation(INFE)wascreatedtooutreachbeyondtheOECDMembercountries.

INFEisapartnershipnetworkdirectedtowardsstrengtheninginformationsharing,collectionofevidence,developinganalyticalworkandrelatedpolicyinstruments.

Increasingly, individual countries recognise that good financial literacy skills enable persons to makebetter-informeddecisionswithregardtotheirshortandlong-termfinancialwell-beinginan increasinglycomplexfinancialmarketplace . Theimportantneedforpersonstoplanforretirement,asdiscussedpreviously,however,isbalanced23

DO YOU KNOW? Financial literacy is not just about the mechanics of checking bank accounts, or even budgeting for future savings. The definition can be expanded to include learning about selecting between a multiplicity of choices, setting personal financial goals, and reflecting on values about money.

FinancialLiteracy:Goalsandvalues,notjustnumbers,Criddle,E.(2006)

DO YOU KNOW? Surveys to determine the level of a person’s understanding of financial literacy ask questions with regard to matters such as: Money management and budgeting; managing a debt; saving; recognising a scam; getting information about money; understanding rights and responsibilities; dealing with credit cards; choosing appropriate insurance; dealing with financial service providers; planning for retirement; investing; understanding financial language; saving, ensuring enough money for retirement; online banking; borrowing and debt. Financialliteracyandbehaviouralchange,March2011,ASIC

Pg 9, Grifoni, A. and F. Messy (2012), “Current Status of Na'onal Strategies for Financial Educa'on: A Compara've Analysis and Relevant23

Prac'ces”, OECD Working Papers on Finance, Insurance and Private Pensions, No. 16, OECD Publishing. hkp://dx.doi.org/10.1787/5k9bcwct7xmn-en

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http://dx.doi.org/10.1787/5k9bcwct7xmn-en


bytheneedtoplanfortheimmediateandlong-termfutureandinparticularforunexpectedlifecycleevents–particularlygiventhepersistentdifficulteconomicsituationintheEuroZone.

Asself-responsibilityincreases,theneedtoimprovelevelsoffinancialliteracythroughfinancialeducationisincreasinglyapparent:peopleneedtoknowhowmuchandhowtoinvestand/orsaveandtheyneedtobecomeinvolvedwithfinancialmarketsinordertobuildtheirfamiliesassetwealthandtomanagethatwealthduringdifferentcyclesoftheirlifejourney.Thisisbecausenotallsavingsaresavingsdirectedtowardsretirement.

Savingsarealsodirectedtowardsthegradualimprovementofone’slife-style–thatisshorttermsavingforconsumerdurables,holidays,orgifts;orlonger-termsavingfor,say,achild’seducationorwedding,orthedepositonacar.

Thus,knowledgeonre'rementincomeandfinancialliteracyisakeylifeskillforcurrentandfuturegenera'ons.Inaddi'on,itisanimportantelementofeconomicandfinancialstabilityanddevelopmentasitincreasestheMalta’sna'onalsavingra'o.

Tradi'onaleconomictheoryunderlinesthatapersonactsra'onally,whereinthroughouttheirlife-cycletheywillborrowwhenyoung,saveinmiddleageandbuildswealth,andspendtheirsavingsinoldage.

Intruth,apersondoesnotactrationallywhentheycomestoplanlongterm.Evidencefrombehaviouraleconomicsresearchshowsthatpersonsarebadatcommittingtosaveforretirement.Procrastination,myopiaandinertialeadmanypersonstopostponeoravoidmakingthecommitmenttosavesufficientlyforthelongtermevenwhentheyknowthatthisisultimatelyintheirbestinterest.

� �32

DID YOU KNOW? The following is a profile of Malta’s level of financial literacy:

- 90% know what ‘division’ means. - 61% understand ‘time value of money’. - 96% understand ‘interest paid on loans’. - 95% understand ‘calculation of interest plus principal’. - 70% understand ‘compound interest’. - 84% understand ‘risk and return’. - 83% understand ‘definition of inflation’. - 71% understand ‘diversification’. Source:Mangion,A.,AnAnalysisofFinancialLiteracyinMalta,UniversityofMalta,May2015


DO YOU KNOW? The following are some of the key behavioural responses when it comes to financial decision making:

Anchoring and adjustment: An initial value or starting point which influences the final decision. The anchoring effect decreases but does not vanish with higher cognitive ability. Choice preference: Too many options inhibit or overwhelm selection decision-making. Confirmation bias: People use data selectively to agree or confirm their existing views. Investors with a stronger confirmation bias also exhibit greater over confidence. Loss aversion: People more strongly prefer to avoid small losses than acquire larger gains. Loss aversion is not invoked when spending money that is within an intended budget for purchases, but only when operating outside the intended budget. Loss aversion can actually be a motivation to invest to the extent that when people perceive a loss, they become risk-seeking as opposed to risk averse. When assessing a situation from the perspective of a potential loss, ‘loss framing’ will occur. An investor on a losing streak, for example, may well decide that greater risk is necessary to achieve their target. Myopic loss aversion: Combination of loss aversion and a tendency to evaluate outcomes frequently. This leads investors to be more willing to invest a greater proportion of their portfolio in risky assets if they evaluate their investments less frequently. Overconfidence: People tend to trade frequently and hurt their own investment performance. Investors are more likely to be overconfident when they are less experienced as they learn about their true ability through experience. Investors with biased information-processing behaviour in virtual communities are likely to trade more actively and realise worse performance due to their overconfidence. Overconfident investors, who show a better than average bias, trade more frequently. Temporal framing: People too heavily discount future benefits in lieu of present consumption.InternationalOrganisationofSecuritiesCommissions,StrategicFrameworkforInvestorEducationandFinancialLiteracy,FinalReport,FR09/14,2014

� �33


Indeed,peopleknowtheyshouldsave,andhavethebestinten'onsofdoingsobut,whenfacedwithcomplexityandchoiceoverload,theydecideto‘doittomorrow’.Atthesame'me,peoplealsotendtoexhibitastrong‘statusquo’bias.Havingmadeadecision,theytendtos'ckwithit. 24

AsthefinancialservicesmarketinMalta,maturedoverthepasttwodecades,therewasanincreaseinaverageearnerssavingwithfinancialins'tu'ons.

Researchoverseasshowsthatpeopleonlowincomesaremorelikelytosaveinformally,mostoftenkeepingcashathome,orwithfamilymembersandthatahighproportionofsuchhouseholdssaveforbirthdaysandholidays,butdonotsaveforthelongterm. 25

Giventhatpeoplecannotplanovertheirlife'mebecauseofbiasesandjudgementsbasedonrulesofthumb,orsocialandculturalnorms,theprovisionofinforma'onforlifecycleandre'rementplanning,togetherwiththeinculca'onofacultureforsavingforone’sre'rement,cannotbeoveremphasised.InMaltathediscoursewithregardtotheprovisionofinforma'ononre'rementplanningandfinancialliteracyislimitedatbest.Thegovernmenten'tyresponsibleforpensions,providesfewtoolsdirectedtoassistpersonstounderstandtheStatepension,thelevelofpensionincometheywillreceive,howlifechoicesposi'velyornega'velyimpactsuchincome,andhowsavingsandotherassetscouldcomplementincomefromtheStatepension.

Morerecently,sincethe2004pensionreform,theprivatesectorhastakenanactiverolein‘selling’theimportanceofsavinginfinancialproductsforinvestmentandretirementpurposes.Indeed,thefinancialmarketserviceprovidersaretodaykeypromulgatorsinthisregard.Privatesectoroperatorsarenotexactlyneutralandtheiractivepresenceinprovidingfinancialinformationwithregardtoliteracyaswellasinvestmentandretirementplanningisdrivenbyincreasingmarketshare.

DO YOU KNOW? 41.6% of Maltese persons state that the information available on retirement is poor whilst a further 39.8% say that it is adequate. Of those who say that the information is poor, 90.3% do not save for retirement.

Source:T,Galea.,AnalysingRetirementPlanningandAwarenessamongtheFutureWorkingGeneration,UniversityofMalta,May2015

Pg15, Lewis,S.andF.Messy(2012),“FinancialEduca'on,SavingsandInvestments:AnOverview”,OECDWorkingPapersonFinance,Insurance24

andPrivatePensions,No.22,OECDPublishing.hkp://dx.doi.org/10.1787/5k94gxrw760v-en

Pg13,Ibid25

� �34

DO YOU KNOW? The most important asset investment products in Malta are:

- 87.6% in savings or time deposits. - 47.7% in property. - 34.1% in savings / investment with an insurance

company. Source:Mangion,A.,AnAnalysisofFinancialLiteracyinMalta,UniversityofMalta,May2015

http://dx.doi.org/10.1787/5k94gxrw760v-en


Financialliteracyisnothelpedbytheactualcomplexityofthetopic.Conventionaleconomictheorysuggeststhatchoiceisgoodasitmakesamarketoperatemoreefficientlyandhencebenefitsallconsumersasitallowspeopletomakethebestchoicefromtheoptionsonofferandtobuy(orswitchto)thatchoice.Researchsuggests,however,thatthisdoesnotworkincomplexmarketssuchasthefinancialservicesmarket.Insomecontexts,therearetoomanychoicesandtheproductsaretoocomplicated.Thedecision-makingprocessisfurthercomplicatedbythetaxtreatmentofproducts:somemaybetaxincentivised.Facedwithtoomuchchoice,peoplearelikelytomakethewrongdecisionornodecisionatall:theywillnotbuyaproductortheywillstickwithwhattheyalreadyhave .26

Thewayfinancialservicesproviderspresentinvestmentchoicescanactasabarriertosavingorresultintheaveragepersonmakingthewronginvestmentdecisions.Companiesthatoperateinthefinancialservicesmarketmakeextensiveuseofjargon,anddra$documentsinalegalis'cway.Tooo$en,disclosurerequirementsarein‘smallprint’thatcanruntodozensofpages. Manya'metheseareincomprehensible27

totheaverageconsumer.Facedwithinforma'ontheydonotunderstand,anaveragepersonislikelytobedeterredfrominves'nginfinancialproductsthatcouldbeusefultothem.

DO YOU KNOW? The Bank of Valletta (BOV) has a number of structured initiatives related to financial education. These include Tailored Investment and Insurance Information Sessions and the BOV IEP. The BOV undertakes such activities as part of its Corporate Social Responsibility policy and during such sessions staff is precluded from referring to BOV products.

HSBC engages speakers from its various groups of companies to address seminars on financial education to the general public and its shareholders. HSBC undertakes such activities to secure a better informed local business community and more financial savvy shareholders and clients.

MSV Life has a section on financial education on its website as well as tools and promulgates the importance of saving, investments and insurance including preparation for retirement through various media channels, including but not limited, to workplace financial clinics, national seminars, social media, etc. MSV Life undertakes such activities to create public awareness in relation to key financial planning areas, improve the level of financial literacy, increase the nation’s savings ratio and improve personal financial security. MSV Life acknowledges that increased financial literacy and knowledge on retirement income increases sale of their products and services. Vella, L., The Maltese Pension Reform and Financial Education, 2015 (Masters Dissertation)

DO YOU KNOW? Only 61.4% of Maltese persons are able to answer correctly the question of whether an inflation of 5% results in more or less purchasing power. Source:Mangion,A.,AnAnalysisofFinancialLiteracyinMalta,UniversityofMalta,May2015

Pg18,Ibid26

Ibid27

� �35


Theresultiscertaintypesoffinancialproducts,whethertheseareforinvestment,savingsorre'rement,aremadetobemorecomplicatedthantheyactuallyare:aconsequenceofwhichisthatpeoplemaynotunderstandimportantproductfeatures,likechargesandrisks. 28

Othertypeofproductssuchascontractsfordifference,binaryop'ons,turbos,exchangeablebonds,callablebonds,pukablebonds,conver'blebonds,perpetualbonds,subordinatedbonds,warrants,cer'ficates,deriva'vesrela'ngtounderlyingsecuri'es,currencies,interestrates,yields,orcommodi'es,creditlinkednotes,andassetbackedsecuri'es,whichwerepreviouslyaccessiblemainlytoprofessionalinvestors,areintrinsicallycomplex.Theyexponen'allyincreasetheriskthatcustomersdonotunderstandtheexposure,costsandexpectedreturnsoftheproductstheyarebuying.‑ Complexity,however,isarela'veterm.Manyelementscanmakeaproductdifficultto29understand.Aproductislikelytobeconsideredcomplexiftheproduct: 30

• Isaderiva've,orincorporatesaderiva've(thatis,afinancialinstrumentwherethevalueisbasedonthevalueofanotherfinancialinstrument,orofsomeotherunderlyingfinancialassetorindex,suchasforeigncurrenciesorinterestrates-theyareo$enincludedinafinancialproducttoproduceorenhanceacertaininvestmentstrategy,aswellastohedge,oroffset,certainrisks).

• Hasunderlyingassetsorindicesthatarenoteasilyvalued,orthepricesorvaluesofwhicharenotpubliclyavailable.

• Hasafixedinvestmenttermwith,forexample,penal'esincaseofearlywithdrawalthatarenotclearlyexplained.

• Usesmul'plevariablesorcomplexmathema'calformulastodeterminetheinvestmentreturn.

• Includesguaranteesorcapitalprotec'onthatarecondi'onalorpar'al,orthatcandisappearonthehappeningofcertainevents.

Productsareo$enaggressivelymarketed.Adver'sementstendtouseen'cingsloganssuchas‘absolutereturn’,‘guaranteed’,and‘hedgedgrowth’,oradver'sereturnsfarinexcessofdepositaccountreturnsthatareavailablefrombanks.Theseheadlinepromiseso$enturnouttobemisleading,ormeansomethingdifferenttowhatonemayhaveunderstood.ThreeassessmentscarriedoutbyEuropeanSupervisoryAuthori'es,onhowfinancialservicesproviderssellproducts,iden'fiedthefollowingprac'ces: 31

• Investorsreceiveno,insufficientormisleadinginforma'onaboutproductcharacteris'cs,pricesorrisks.

• Investorsreceiveno,insufficientormisleadinginforma'onaboutthefinancialstatusoftheissuingprovider.

• Investorsandexis'ngdepositorsareapproachedthroughaggressivesellingtechniques.

• Exis'ngdepositorsareproac'velyapproachedbyfinancialins'tu'onsandaregiventheimpressionthatarecommendedproductisassafeasadepositorisprotectedbyadepositguaranteescheme,neitherofwhichmaybetrue.

DO YOU KNOW? There are certain risks and potential disadvantages involved in investing in complex products: which risks and disadvantages may not be apparent, or easy to understand. You need to be fully aware of these risks - liquidity risks, leverage risks, market risks, credit risks - and ensure you sufficiently understand the key features of a product in order to make an informed investment decision. Source:Risksofinvestingincomplexproducts,EuropeanSecuritiesandMarketsAuthority,7ta'February2014

Ibid28

http://www.esma.europa.eu/content/ESMA-tells-firms-improve-their-selling-practices-complex-financial-products29

http://www.esma.europa.eu/system/files/investor_warning_-_complex_products_20140207_-_en_0.pdf30

hkp://www.esma.europa.eu/system/files/jc_2014-62_placement_of_financial_instruments_with_depositors_retail_investors_and_31

policy_holders_self_placement.pdf

� �36

http://www.esma.europa.eu/content/ESMA-tells-firms-improve-their-selling-practices-complex-financial-products

http://www.esma.europa.eu/system/files/investor_warning_-_complex_products_20140207_-_en_0.pdf

http://www.esma.europa.eu/system/files/jc_2014-62_placement_of_financial_instruments_with_depositors_retail_investors_and_%20policy_holders_self_placement.pdf


• Investorsareexposedtomisleadingmarke'ngandadver'sing.

• Investorsaresoldbundledproductsnotrequested.

• Investorsreceiveunsuitableadvice.

• Investorsaresoldinappropriateproductsduringnon-advisedsales.

Inthelocalcontext,MFSAstatesthatan“alarmingnumberofmis-sellingcases”wereinves'gatedbyitsConsumerComplaintsUnitoverthepastfiveyears.Itunderlinesthatitis“disturbingtolearnabouttheapproachandconductofanumberoffinancialen''es,andsomeoftheiremployees,whichhavecompletelydisregardedtheveryessenceoftheregulatoryregime”thattheAuthorityhadinplace:theobliga'ontoactinthebestinterestsofclients–wheremanyinvestorswere“providedwithproductsthatfailedtoperformasfirmsledthemtoexpect”. 32

TheMFSAaddsthatthemajorityofinvestorsare“notprovidedwithclearinformationonthetermsofthecontractbeforetheycommittedthemselvestopurchasingtheseproductsandonlygottoknowaboutthetruerisksattachedtotheseproductswhenproblemsstartedtoemerge”.Moreover,theMFSAidentifiesthatanumberofinvestors“weresoldcomplexinvestmentsorinvestmentswhichwereonlysuitableforthosewhowereexperiencedintheinvestmentfield,whileotherinvestorsthoughttheywerereceivingadvicebutthen,whenitwastoolate,learntthattheyweresigningpaperworkwhichstatedthecontrary”. 33

Inconclusion,itisinterestingtonotethefollowingfindingsfromasurveyof1,255respondents,carriedoutbyanundergraduateresearchstudent.ThesurveywasdirectedatFacebook,theGeneralRetailersandTradersUnion,theNationalCouncilofWomenandUniversityofMaltastaffandstudents.Theresearcher’ssurveywassimilarlystructuredtoothersusedinthisareaofresearch,mostnotablythosecarriedoutbytheOECDandtheINFE.

DO YOU KNOW? Investment-related complaints are 61% of the complaints received and processed during 2013 by the Malta Financial Services Authority. To the most part, complaints related to claims of mis-selling of various complex and structured investment products.

Pg2,ConsumerComplaintsUnit,MaltaFinancialServicesAuthority,AnnualReport,201332

Pp2-3,Ibid33

� �37

BankingProductsLifeInsuranceMotorInsuranceTravelInsuranceGAPInsuranceOtherLifeInsuranceOtherNon-LifeInsuranceAsset-BackedSecuri'esCollec'veInvestmentSchemesOnlineCurrencyTradingPerpetualSecuri'esForeignCorporateBondsVariousInvestments


Withregardtothefinancialbehaviourofthepopulationresearched,thestudysuggeststhatitisriskadverse,asbillsarepaidontime,purchasesmadeonlywhenafforded,regularincomesoughtandinvestmentsbiasedtowardscapitalguaranteedtypeofproducts. 34

Table 04: Financial Behaviour of Survey Audience (Facebook, the General Retailers and Traders Union, the National Council of Women and University of Malta staff and students) 35

Withregardtofinancialliteracy,thestudysuggestssimilarresultstostudiescarriedoutinterna'onally:mainlythatwomenarelessfinanciallyliterate,theyoungandtheoldarelessfinanciallyliteratethanmiddle-aged,whilstthemoreeducatedpeoplearemorefinanciallyknowledgeable.ThestudyfoundthatMaltesepersonsseemtohaveagoodunderstandingofsimpleandcompoundinterestanddiversifica'on.Forthe“Division”andthe“TimevalueofMoney”concepts,thepopula'onsurveyisalignedwithcountriessuchasAlbania,Malaysia,IrelandandPeruandwithHungaryandMalaysiaforthe“interestonloan”;andIrelandforthe“riskandreturn”aswellasthe“defini'onofinfla'on”concepts. 36

Table 05: Financial Literacy of Survey Audience (Facebook, the General Retailers and Traders Union, the National Council of Women and University of Malta staff and students) 37

Carefullyconsiderspurchases 90%

Paysbillson*me 86%Keepsclosewatchonpersonalfinancialmaders 70%Setslongtermgoalsandstrivestoachievethem 48%Hasahouseholdbudget 60%

Boughtinvestmentsinthepastyear 22%

Howinfluen*alaresourcestoyourinvestmentdecisions 53.3%

Receivedprofessionalbudgetadviceaboutpersonalfinance 42%

Division 90%

Timevalueofmoney 61%Interestpaidonloan 96%

Calcula*onofinterestplusprincipal 95%

CompoundInterest 70%

Riskandreturn 84%Defini*on 83%Diversifica*on 71%

Pg58,Mangion,A.,AnAnalysisofFinancialLiteracyinMalta,UniversityofMalta,May201534

Ibid35

Ibid36

Ibid37

� �38


� �39

Strategic Measures on Retirement Income and

Financial Literacy Chapter 03


3.1 Introduction

Theneedforknowledge,informa'onandcommunica'ononre'rementincomeandfinancialliteracyhasneverbeengreater.Malta’sbabyboomershavenowlongstartedre'ring,andanincreasingnumberofre'reeswilllivelongerinre'rement.Indeed,uni-sexlongevityinMaltaisexpectedtoincreasebyapproximately6yearsoverthenext45years.Asthenumberofpeoplewhore'relivelongerastheirlifeexpectancyincreasesthepressureontheadequacyandsustainabilityofthepensionsystemincreasestoo.

Asshownpreviouslyinthisdocument,whilstthereformsundertakensince2004soughttoensurethattheadequacyofthepensionsystemissufficientlyadequatetoprovidedignitytopersonsinre'rementtheStatepensionincomeonitsownwillnotbesufficienttoensurethatre'reesenjoyaqualityoflifebasedontheirpre-re'rementincome.

Atthesame'methefinancialmarketplacecon'nuestoevolveandinnovate.Yetinvestmentproductsareincreasinglycomplexandfinancialservicesincreasinglydiverse.Maltastartedtoexperienceitsownstoriesofmalprac'ceinthefinancialservicesmarketsuchasmis-selling,misuseoffunds,etc.–whichinturnimpactstrustinfinancialservicesproviders.

Alackofknowledgeonre'rementincomeandfinancialliteracymay,therefore,causepersonstostartsavingtoolateinlifetomaintainthequalityoflifetheyenjoyedduringemployment.Asaresult,theymaynotreachtherightbalancebetweencurrentconsump'onwhilstinemploymentandfutureconsump'onduringre'rement.Inaddi'on,

lackofinforma'onconcerningtherisk-returndistribu'onofvariousinvestmentsorinves'ngincomplexproductswithouttheappropriatelevelofknowledgemaynotonlyresultpersonsinmisalloca'ngtheirinvestmentporpoliobutalsoinlosingasignificantpor'onofitduetobaddecisionmaking.

Indeed,thefinancialcrisisresultedinsignificantlossofvalueinfinancialassetsand,thusaffectednega'velythenetworthandre'rementincomeofmanypersonswhowerealreadyinre'rementorapproachingre'rement.Forexample,aprimereasonofwhypersonsreachingoralreadyinre'rementhadtheirre'rementsavingsnetworthnega'velyaffectedinthe2008triggeredfinancialcrisisisthatwhentheynearedtheir

re'rementdatetheyfailedtomovetheirinvestmentporpoliofromonebasedonequityandsharestoonebasedonconserva'vebondsandsecuri'es.Indeed,researchshoesthatpersonswhomanagedtheirinvestmentporpolioaccordinglyintheyearsprecedingre'rementhadtheirre'rementnetworthrela'velyuntouchedduringthefinancialcrisis.

DO YOU KNOW? Financial education can benefit consumers of all ages and income levels. For young adults just beginning their working lives, it can provide basic tools for budgeting and saving so that expenses and debt can be kept under control. Financial education can help families acquire the discipline to save for a home of their own and / or for their children’s education. It can help older workers ensure that they have enough savings for a comfortable retirement by providing them with the information and skills to make wise investment choices with both their pension plans and any individual savings plans. OCED,ImprovingFinancialLiteracy,AnalysisofIssuesandPolicies,2005

� �40

DO YOU KNOW? “The low level of financial literacy observed in most countries has been, if not a direct cause of the [2008 financial] crisis, at least one of the aggravating factors.” OECDSecretaryGeneralAngelGurria


3.2 Vision for Improving the Financial Well-being of Maltese Citizens

ThisstrategyrecommendsthefollowingasavisionforthestrengtheningofthefinancialcapabilityofMalteseci'zenswithregardtore'rementincomeandfinancialliteracy:

“Improvingthepersonalfinancialwell-beingofMalteseci'zensduringlife-eventsandre'rementbyenablingthemtomakebekerinformedfinancialdecisionsthatfittheircircumstances”.

3.3 The Principles Underpinning the Attainment of the Vision

Thisstrategyrecognisesre'rementincomeandfinancialliteracyskillstobeessen*allife skills. Thestrategyisunderpinnedbythefollowingprincipleswhere-byMalteseci'zens:

• UnderstandhowtheStatepensionsystemworksandtheresul'ngre'rementincometheyreceiveasaresultoflifechoices;andhencetheyareinaposi'ontomakebekerinformedlife'medecisions.

• Understandtheimportanceofsavingandinves'ngforone’sre'rement;andthus,aremoreengagedtopreparefortheirre'rement.

• Understandbekerthanpreviousgenera'onstherangeofcomplexfinancialmanagementstrategiesencompassingmakerssuchasassetmanagement,taxandsuccessionplanning,andinsurance.

• Aremorecompetentonhowfinancialmarketsoperateandindecidingoninvestmentandsavingsproducts.

• Areawareoftheirrightsandprotec'onmechanismswheninves'ngorsavinginfinancialproducts.

3.4 The Strategic Thrusts

Thestrategyproposesthattheseprinciplesareachievedthroughthefollowingthrusts:

• Useofeduca'onalpathwaystopromulgateknowledgeonre'rementincomeandfinancialliteracy.

• Providetrustedandindependentinforma'onandundertakeprogrammesdirectedtochangebehaviourandinculcateanewculturevis-à-vislongtermre'rementplanning.

• Workinpartnershipstostrengthentheconnec'onsbetweenallpar'esinvolvedinre'rementincomeandfinancialliteracy.

� �41


3.5 Use of Educational Pathways to Promulgate Knowledge on Retirement Income and Financial Literacy

Financialeduca'onisincreasinglyimportant.Ifindividualsdobecomefinanciallyeducatedtheyaremorelikelytosavefortheirre'rement,tochallengefinancialserviceproviderstodevelopproductsthattrulyrespondtotheirneeds,tounderstandriskanddiversifica'on,andtoenterandmanagesustainabledebt.

Thevalueoffinancialeduca'oncannotbeoverstated.Therearecompellingreasonstorequirefinancialeduca'onincompulsory,voca'onalandhigherandfurthereduca'on.Justasitisimpossibletosucceedinthemodernworldwithouttheabilitytoread,write,anduseoftechnology,itisjustasimpossibletosucceedinthepresentcomplexglobaleconomyandfinancialsystemwithouttheABCsofeconomicsandfinance:financialliteracy.

Quitesimply,themoreaccesstolearningopportuni'eschildrenandyouthsaregiven,themorefinanciallysecurefuturegenera'onsarelikelytobe. 38

Thestrategyiden'fiesanumberofeduca'onpathwayswithregardtore'rementincomeandfinancialliteracy.Asimportantly,thestrategyunderlinestheimportanceofall

stakeholderstocometogetherandalignresourcesasnecessaryforfinancialeduca'on.

Thefollowingdiscussesthestrategicpathwaystofinancialeduca'on.

COMPULSORYEDUCATION

Thereisinterna'onalrecogni'onthatfinancialeduca'onshouldbeintegratedintotheschoolcurriculumaspartofacoordinatedna'onalstrategyonre'rementincomeandfinancialliteracy.Thisassuresthateverychildinacountryisexposedtothissubjectmakerthroughtheirschoolcurriculum .INFEfurtherrecommendsthatlearningframeworks39

onfinancialeduca'onshouldideallyencompassknowledgeandunderstanding,skillsandbehavioursandabtudesandvalues.

AsshowninBoxAdifferentcountriesadoptslightlydifferentapproacheswithregardtothefocusoftheirrespec'vefinancialeduca'onframeworks.

Pg 7, APEC Guidebook on Financial and Economic Literacy in Basic Educa'on, Human Resources Development Working Group, Asia Pacific38

EconomicCoopera'on,2014

Pg5,Guidelinesonfinancialeduca'onatschoolandguidanceonlearningframework,Interna'onalNetworkonFinancialEduca'on,OECD39

� �42

The key guiding principles to Financial Literacy: The 2012 New Zealand National Strategy for financial literacy sets the following guiding principles:

- Impartial - Appropriate for the audience - Non-judgemental - Accessible - Timely - Evidence based


BoxBpresentsacompara'veassessmentadoptedbyAustralia,EnglandandtheNetherlandswithregardtolearningoutcomes.

The Na'onal CurriculumFramework(NCF)introduced inMalta in 2012 iden'fies the importance ofembeddingfinancialeduca'onwithinit. TheNFCposi'onsfinancialeduca'onasfollows:

• Primaryand Secondaryyears:The learningarea is to includefinancial literacyaspects suchasmathema'calandfinancialunderstandingaslearningoutcomes.

• Junior and Secondaryyears: The mathema'cs learning areaisto include financial literacy aspects such asmathema'cal andfinancial understandings toensurethatacultureoffinancialplanningandprepara'onisins'lledandnurtured duringtheJuniorandSecondaryCyclesofeduca'on.

• Amoveawayfromanexclusivelysubject-basedapproachtoonethatismorecross-curricularapproach,wherefinancialliteracyistaughtinawaythatreflectsreallifesitua'onsandencouragestransferofskillsfromonelearningareatoanother.

Table 06: Current Learning Outcomes Framework for Financial Literacy Drafted under the New National Curriculum

Examples of Financial Education Frameworks (Box A)

In Scotland, Northern Ireland and England the financial education frameworks were developed by government education agencies with responsibility for the school curriculum. In Malaysia, Japan and the Netherlands there was significant private sector input. In the United States the framework was developed by the Jump$tart Coalition for Personal Financial Literacy. In Brazil, New Zealand and South Africa government funded agencies with responsibility for national leadership of official education strategies took a leading role in developing the framework.

The Australia and Malaysian frameworks focus on the development of ‘financial literacy’, whereas the Australia and Dutch definitions also include consumer literacy.

The New Zealand, English, Scottish, and Northern Ireland frameworks’ focus in on ‘financial capability’. Whilst different terms are used for the focus of the financial education frameworks there are strong similarities for the terms.

In all cases, ‘financial literacy’ and ‘financial capability’ are all seen as more than being able to make calculations about money. Both are seen as competencies involving knowledge and skills and the ability to make calculations about money. Both are seen as competencies involving knowledge and skills in the ability to use these to make effective financial decisions. For the countries using the term ‘financial capability’ this is defined as the ability to make informed decisions about the personal use and management of money. ‘Financial literacy‘ is seen as encompassing behaviours, knowledge, understanding and skills.

Level1 Level2 Level3 Level4 Level5 Level6 Level7 Level8 Level9 Level10

CategoryASubjects

Mathema'cs

Personal,Social&CareerDev

SocialScience

CategoryBSubjects

HomeEconomics

CategoryCSubjects

Accoun'ng

BusinessStudies

Economics

� �43


� �44

BoxB:ExamplesofLearningOutcomes

Na8

onalCon

sumerand

FinancialLite

racyFramew

ork

Australia

FinancialEdu

ca8o

nLearningFramew

ork

Englan

d,UnitedKingdo

mEduca8

onLearningFram

ework

Nethe

rland

s

Year4

Stage4

Age12-14LowerSecon

darySchoo

l

Know

ledgean

dUnd

erstan

ding

Stud

entscan:

•Explainsomediffe

rentfo

rmsthatm

oneycanta

kedifferen

tform

sofincom

e.

•Explaintheroleofworkinsocietyand

dis8

nguishbetween

paidand

unp

aidwork.

•Explainho

wsavingmon

eyin

afinancialins8tu8

oncanearn

interest.

•Explainwhysimilarg

oodsand

servicesm

ayvaryinprice.

•Iden

8fy,explainandpriori8

sedifferen

tneedsand

wants.

•Re

cognise

thatdifferen

tcou

ntrie

susedifferen

tcurrencies.

Stud

entswillund

erstan

d:

•Ho

wwagesand

salarie

sarecalculated.

•Ho

wded

uc8o

nssu

chastax,na8

onalinsuranceandpe

nsion

contrib

u8on

saffe

ctta

kehom

epayandwhatthe

yareused

for.

•Im

plica8

onso

fcredita

nddeb

t(loans,overdraRs,m

ortgages),

howcostsaccum

ulateover8me.

•Ho

winsuranceworksand

thetype

sofinsurancere

levantto

youn

gpe

ople.

•Ho

wand

whyinterestra

tesv

aryover8me,accordingto

the

levelofrisk

associatedwith

them

(includinglengthof

commitm

ent)and

how

thiscanaff

ectp

eople.

•Thediffe

rencesbetweensecuredandun

securedloansa

nd

purchaseagreemen

ts.

•Thediffe

rencesinriskand

returninvolved

inth

eseUngup

andrunn

ingofabusiness.

•Theprivatesectorfinancialins8tu8

onsthatm

akemon

ey

throughthechargingofahighe

rinteresto

fratetoborrowers

thansa

versand

bysellingfinancialservices.

•Ho

wcom

paniesand

otherorganisa

8onsarefinanced

.•Ho

wand

whyfo

reignexchangera

tesfl

uctuate.

•Themainareaso

fna8

onaland

localgovernm

entfi

nancing

andspen

ding.

•Rightsand

respon

sibili8e

srefin

ancialprodu

cts.

MainTh

eme1:M

apping

Keep

ingprop

eraccou

nts

•Ch

ildren

can

keep

impo

rtantdo

cumen

ts(pape

rord

igita

l)suchascontracts,guaranteecer8fi

cates,banksstatemen

ts,

incomestatem

ents8dilyand

find

them

immed

iately.

•Theycankeeplog-indataforw

ebsitesand

log-inpagessa

fely.

•Theycankeepreceiptseith

erforguaranteesorin

orderto

exchangeprodu

cts.

Performan

cetran

sac@on

s•Theycanm

aketheirp

aymen

tson8m

e.

•Theycanuseadeb

itcardsa

fely.

•Theyareawareofthe

poten

8ald

angersw

henusingade

bit

card.

•TheycankeepPINnum

bersand

othercod

es,log-in

dataand

passwordsse

cret.

•Theykno

wwhattolookoutfo

rtomakesureaweb

siteand/

ore-m

ailissafeandtrustw

orthy.

•Theyareawareofth

epo

ten8

aldangerswhe

npaying,suchas

phish

ing,m

oneym

ules,and

skim

ming.

•Theykno

wwhato

n-linebankingis.



� �45

Compe

tence

Studentscan:

•Usem

oneytobuybasicgoodsandservicesin‘real-life’

contexts.

•Createsim

plebudgetsforspecificpurposes.

•Accuratelycompletesim

plefinancialform

s,includingfor

onlinetransacBonsclassifyandcomparegoodsandservices.

•Orderanddiscussreasonsforspendingpreferences.

•DiscusssomeopBonsforpayingforgoodsandservicessuch

as:cash,debitcard,creditcardanddirectdebit.

•IdenBfykeyfeaturesofarangeofadverBsements.

andspending.

•RightsandresponsibiliBesrefinancialproducts.

Studentswillbeableto:

•IdenBfyfinancialqualiBes,aKtudesandskillsfor

employability.

•Calculateyoungpeople’searningandbenefits

includingstudentfinance/loans.

•Comparetheadvantagesanddisadvantagesof

differenttypesofpayment.

•Balanceincomeandexpenditure–weeklyand

longerterm

budgeBng.

•Interpretbillsandpersonalfinancestatements,

extracBngkeyinform

aBon.

•Calculatecompoundinterest

includingthe

significanceofannualequivalent

rateandthe

annualpercentagerate.

•Find,useandevaluatefinancialadviceand

inform

aBonfromInternet,product

adverBsing,

financialadvisers,CiBzensAdviceBureau.

•Usetheirknowledgeofthem

arkettoworkoutthe

bestdealinproductsandservices.

•Useunderstandingtocalculateexchangerates.

•Makebasicrisk/rewardassessmentinrelaBonto

savingandborrowing.

•Developasenseoffinancialrisk,recogniseand

learnfromm

istakesinfinancialdecisions.

Earningmon

eyofyou

rown

•Theyknowhowtoclaim

backtaxiftheyareemployed.

Mainthem

e2:respo

nsiblesp

ending

Makingchoices

•TheyunderstandtheposiBveandnegaBveconsequencesof

theirpaymentdecisions.

•Theyknowthedifferencebetw

eenmoneythathastobe

spentandm

oneythatcanbespent.

•Theyknowwhichexpendituretheycannotavoid.

•Beforemakingapurchase,theycanworkoutwhetherthey

canaffordit.

•Theydonotspendm

orem

oneythantheyhave.

•Theyunderstandthattheirsocialenvironmentaffectstheir

choicesandviceversa.

•ControllingtemptaBon

•TheycanrecognizeadverBsing,commerceandsocial

pressure.

•Theyareawareoftheim

pactofadverBsementsontheir

spending.

•Theyareawareoftheinfluenceoftheirfriendandclassmates

ontheirspending.

•TheycandisBnguishbetw

eentheirownwishesandwishes

suggestedbyadverBsementsandotherpeople.

•Theycanassesswhethera‘specialoffer;reallyisone.

•Theycanm

akechoicesonthebasisofwhattheyneedand/

oralreadyintendtobuyratherthanthefactthatthisisa

‘special’offer.



� �46

Respon

sibilityan

den

terprise

Studentscan

•Iden-fyanddescribetheim

pactthattheconsumerand

financialdecisionsofindividualsm

ayhaveonthemselvesand

theirfamilies,thebroadercommunityand/orthe

environment.

•Iden-fyandexplainhowsomeinfluences,suchasadver-sing

andpeerpressure,canaffectwhatyoubuy.

•Applyconsumerandfinancialknowledgeandskillsinrelevant

classand/orschoolac-vi-essuchasstudentinves-ga-ons,

charityfundraising,businessventuresandspecialevents.

•Exercisearangeofenterprisingbehavioursthrough

par-cipa-oninrelevantclassand/orschoolac-vi-es.

•Describesafe,ethicalandresponsiblebehaviourinonlineand

digitalconsumerandfinancialcontexts.

•Explaintheroleplayedbythevoluntarysectorinthe

communitytohelpthoseinfinancialneed.

•Demonstrateawarenessthatfamily,communityandsocio-

culturalvaluesandcustomscaninfluence.

•Consumerbehaviourandfinancialdecision-m

aking.

Studentswillbeableto:

•Iden-fyfinancialquali-es,aJtudesandskillsfor

employability.

•Calculateyoungpeople’searningandbenefits

includingstudentfinance/loans.

•Comparetheadvantages

anddisadvantages

of

differenttypesofpaym

ent.

•Balanceincomeandexpenditure–weekly

and

longerterm

budge-ng.

•Interpretbillsandpersonalfinancestatements,

extrac-ngkeyinform

a-on.

•Calculatecompoundinterestincludingthe

significanceofannualequivalent

rateandthe

annualpercentagerate.

•Find,useandevaluatefinancialadviceand

inform

a-onfromInternet,productadver-sing,

financialadvisers,Ci-zensAdviceBureau.

•Usetheirknowledgeofthem

arkettoworkoutthe

bestdealinproductsandservices.

•Useunderstandingtocalculateexchangerates.

•Makebasicrisk/rewardassessmentinrela-onto

savingandborrowing.

•Developasenseoffinancialrisk,recogniseand

learnfromm

istakesinfinancialdecisions.

Compa

ringpricesand

produ

cts

•Theycanassessthepriceofaproduct.

•Theycancomparevariousproductsinterm

sofpriceandquality.

•Theycanobtaininform

a-on(fromtheshopsortheInternet)

beforebuyingaproduct.

•Theyknoww

hetherapar-cularproductischeaporexpensive

comparedwithsim

ilarproductsonofferelsewhere.

Mainthem

e3:an9

cipa

9ng

•Financialplanning:w

henm

akingcurrentpurchases,theycan

takeaccountofgreaterexpenditurethattheyexpecttoincur

and/orthingstheywanttosavem

oneyfor.

•Saving:(i)theyknoww

hyitisagoodideatohavem

oneyin

reserve;(ii)theycansavem

oneyforlongerperiods;(iii)they

understandthatsavingm

oneyforsomethingw

illtakeacertain

amountof-me.

•Dealingwithloans:(i)theycanpaybackmoneytheyhave

borrowed;(ii)theyknoww

hatadebtis;(iii)theycansaywhat

thedifferenceisbetw

eenborrowingm

oneyandhavingdebts;(iv)

theyknowthattherearevariouswaysofborrowingm

oney.

•Insurance:theyknowwhatinsuranceisandwhatitisfor.

MainTh

eme4:dealin

gwith

fina

ncialrisks

•Assessingthefinancialconsequencesandrisksofeventsand

situa-ons:(i)theyknowthatthereareterm

sandcondi-ons

aVachedtothepurchaseoruseofproductorserviceandthat

thesem

ayhavefinancialconsequences;(ii)theycanw

orkout

whatfinancialconsequencesareaVachedtoanythingofferedfor

‘free’.

•Assessingtherisks

andyields

of

products

withfinancial

consequences:(i)theyknowtherisksinvolvedinlendingother

peoplem

oney;(ii)theyunderstandtheconsequencesoffailingto

paybackborrowedm

oney.

MainTh

eme5:havingsufficien

cykno

wledgeofthe

fina

ncial

land

scap

e•Knowingthevalueofmoney:(i)theyknowthepriceofaproduct

ism

adeupofvariouscosts;(ii)theyknowthat,over-me,you

cannotalwayscon-nuetobuythesamethingforthesame

amountofmoney.

•Knowingtheirrightsanddu-esasconsumerandsuppliers:(i)if

employedtheyknowthattheyandtheiremployersm

ustabide

bycertainrules;(ii)theyknowthatthereisam

inim

umwage;(iii)

theyknowthedifferencebetw

eenlegalandillegalemploym

ent;

(iv)theyknowwhattaxisandwhyyoupayit.



BoxCbelowpresentsthelearningoutcomesascurrentlypresentedundertheNCF.

BoxC:CurrentLearningOutcomesForFinancialLiteracyundertheNCF

CATEGORYA

Mathema*cs

Level5

Number-NumberSystem

Wri'ng1]Icanread,writeandorderwholenumberstotenthousandinfiguresandwords.

Number–NumericalCalcula'ons

Cogni'veLearning

1]Icanadd100or1,000toanywholenumber.

2]IcanunderstandthatIcanaddnumbersinanyorderandgetthesameresult.

3]Icanworkoutasmalldifferencebycoun'ngupfromthesmallertothelargernumber.

4]Icanunderstandthatsubtrac'onistheinverseofaddi'onandviceversa.Icanalsostateandwriteasubtrac'onstatementcorrespondingtoagivenaddi'onstatementandviceversa

e.g.if4+3=7then7-3=4andviceversa.

18]Icanrecogniseunitfrac'onssuchas½and¼andusethemtofindfrac'onsofshapesandnumbers.Icanalsounderstandtherela'onshipbetweenfrac'onssuchas½and¼anddivisione.g.½means1÷2andviceversa.

24]Icanroundanywholetwo-digitnumbertothenearesttenandanythree-digitnumbertothenearesthundred.

25]Icanfindfrac'onsofshapesandsimplewholenumbers.

Number–NumericalCalcula'ons(MoneyandConsumer)

1]Icanunderstandthat1euroisequalto100cents.

2]Icanworkouttotalsuptoahundredeuroandgivethecorrectchange.

3]Icanhandlesmallamountsofmoneyinclassroomsitua'onse.g.keepingtrackofmoneycollectedfromsmallchangeforcharitymoneycollecBons.

4]Icanplananac'vitywithinagivenbudgete.g.usingBckets,travelbrochures,pricelists,menus,etc.

5]Icanusereceipts,simplemenus,entrance'cketstoworkouttotalsandchange.

6]Icanunderstandthatpricesmarkedas€0.99areamarke'ngstrategytomakepricesmoreakrac've.1]Icanusesuppor'vetechnologye.g.tabletsandcomputersandotherresourcese.g.Cuisenairerods,Unifixcubes,base10blocksappropriatetothisleveltocalculateandtolearnaboutnumericalcalcula'ons.

Level6

Number-NumberSystem Wri'ng

1]Icanread,writeandorderwholenumberstoonemillioninfiguresandwords.

� �47



ManagingLearning

1]Icanconverteurotocentandviceversa.

2]Icanworkouttotalsofuptotenthousandeuroandgivethecorrectchange.

3]Icancalculate,compareanddiscussspecialoffers.

Level7

Number-NumberSystem Wri'ng

1]Icanread,writeandorderwholenumberstoonebillioninfiguresandwords.


1]Icanusepublishedexchangeratestoconvertfromonecurrencytoanother.

2]Icanworkouttotalsofuptoonehundredthousandeuroandgivethecorrectchange.

3]Icanworkthroughsimplesitua'onsinvolvingpersonalandhouseholdfinancee.g.pocketmoneyinvestedinabankaccount,findingouthowmuchitwillcosttoprepareameal,calcula'ngwhichitemisthebestbuywhenitemscomeinvarioussizese.g.oilinonelitreboJlesvsoilintwolitreboJles.

NumericCalcula'ons-Percentages Cogni'veLearning

1]Icanfindsimplepercentagesofwholenumberquan''es.

2]Icanconvertpercentagestofrac'onsandviceversa.

3]Icanfindsimplepercentagesofquan''es.

4]Icanexpressaquan'tyasapercentageofanother.

5]Icanfindpercentageincreaseandpercentagedecease.

NumericCalcula'ons–MoneyandConsumerMathema'cs

1]Icanusepublishedexchangeratestoconvertfromonecurrencytoanother.

2]Icanworkouttotalsofuptoonehundredthousandeuroandgivethecorrectchange.

3]Icanworkthroughsimplesitua'onsinvolvingpersonalandhouseholdfinancee.g.pocketmoneyinvestedinabankaccount,findingouthowmuchitwillcosttoprepareameal,calcula'ngwhichitemisthebestbuywhenitemscomeinvarioussizese.g.oilinonelitreboJlesvsoilintwolitreboJles.

Number–NumericalCalcula'ons(Percentages)

Cogni'veLearning

1]Icanworkthroughsimplesitua'onsinvolvingpercentageincreaseanddecreaseusinganumberofmethodsincludingthemul'plyingfactor.

2]Icanworkoutreversepercentagecalcula'ons.

� �48


Level8

3]Icanworkthroughsitua'onsinvolvingsuccessivepercentagechangesusingamul'plyingfactor.

4]Icanworkoutthesimpleinterest,theprincipal,therate,'meortheamount.

5]Icanusethesimpleinterestformula.

6]Icanworkoutcompoundinterest,apprecia'onanddeprecia'on.

7]Icanusetheapprecia'onanddeprecia'onformulae.

8]Icanusethetrialanderrormethodtodeterminethenumberofyearsincompoundgrowthanddecaysitua'ons.

9]Icanworkoutthenumberofrepaymentsneededtorepayaloan.

10]Icanworkoutthetotalaccruedyearlyvalueofaninvestment.

NumericCalcula'ons–MoneyandConsumerMathema'cs

1]Icanrecognisethedifferencebetweensellingrateandbuyingrateincurrencyexchangerates.Icanusebuyingrateandsellingratetoconvertcurrencies.

2]Icanworkouttotalsofuptoonemillioneuroandgivethecorrectchange.

3]Icanworkthroughcomplexsitua'onsinvolvingpersonalandhouseholdfinancee.g.earnings,loans,simpleinterest,compoundinterest,incometax,VATandinsurance.

PersonalSocialandCareerDevelopment

Level5

Health,SafetyandWellbeing

ManagingInternetUse

20]Iknowabouttherisksofsharingpersonalinforma'ononlinee.g.communicaBngwhilstplayinggames.

Ci'zenship LearningtoBe22]Icantalkaboutthebasicwaysofsavingmoney.

23]IcandescribewhatIspendandsaveeachweekormonth.

Level6

Health,SafetyandWell-being

ManagingtheInternetUse

23]Icandiscussthepossiblebenefitsandrisksofsharinginforma'ononline.

24]Iknowhowtosetprivacysebngswhencommunica'ngonline.

LearningtoDo27]Icanarguehowdifferentvaluesinfluencehowpeoplespendtheirownmoneye.g.salary,pocketmoney.

� �49


Ci'zenship SelfAwareness

28]Icanevaluatewhysavingmoneyisimportant;Icanthinkofwaysmoneycanbespentotherthanonmyself.

29]Icanrecogniseanddescribewhatinfluencesmetospendmoneyonmyselfandonothers.

30]Icandescribewhatismeantbybeingfinanciallyresponsibleandprovideexamplesofsomeonebeingfinanciallyirresponsible.

31]Icandemonstratehowmyspendingdecisionsaffectmepersonally,thelocaleconomy,theenvironmentandpeopleinotherpartsoftheworld.

CareerPlanningandExplora'on 3]Icantalkaboutmyfutureaspira'ons.


ManagingInternetUse

26]Icandescribedifferenttypesofcommunica'ontechnologiesandtheiruses,benefitsandpoten'aldrawbacks.

Level7

Ci'zenship LearningtoLiveTogether

20]Icanevaluateinforma'onaboutpriori'esforspending:personal,community-based,environmental.

28]Icantalkabouttheimportanceofmoneyandcanmen'onsomewayswhichhelpmeplanmyspendingcarefully.

29]Icanexplaintherela'onshipbetweenfinancialincomeandexpenditure.

30]Icanmakeinformeddecisionsonhowtoallocatefundraisingmoney.

31]IcandescribewhatbeingfinanciallyresponsiblemeanstomeandhowIwouldmanagemyownfinances.

Level8


ManagingInternetUse

16]Icandescribewhatismeantby‘digitalfootprint’andhowpersonalinforma'ononsocialmediacanbesearchedfor,copiedandpassedon.

LearningtoBe18]Icanexplainmyresponsibili'eswhenusingdigitalmediatokeepmyselfandotherssafefromharm.

Ci'zenship LearningtoBe

22]Icandiscusshowadver'singinfluencessupplyanddemand.

23]Iamawareofandcanexplainthevalueswhichguidemeinmyspendingdecisions.

24]IcandescribewhatIspendandsaveeachweekormonth,whenbuyingproducts.


26]Icandescribewhatismeantbybeingfinanciallyresponsibleandprovideexamplesofsomeonebeingfinanciallyirresponsiblee.g.thepayingorotherwiseoftaxes.

� �50


Level9


ManagingtheInternetUse

24]Icangiveexamplesofhowtoprotectmyownandothers’privacyonline.

25]Icandescribewhenanonlineinterac'onmightbepoten'allyharmfultomyselforothers.

26]IcandescribewhatIwoulddoorwhoIwouldgoto,ifIwasinvolvedinorwitnessedapoten'allyharmfulonlineinterac'on.

27]Icanassessriskinaninformedandmeasuredway.

Ci'zenship

LearningtoBe

25]Icanargueeffec'velyhowmediahasagreatinfluenceonpublicopinione.g.promoBngdifferentlifestyles,sexualisaBon,materialism,needs,wants.

26]Icanillustratehowtobudgetfordifferenteventse.g.goingonholiday,buyingalaptop,buyingclothes,moneyforentertainment,livingindependently.

27]Icanmen'ondifferentwaysofsavinge.g.managemoneysensiblythroughsavingaccountsandknowhowtousecashdispensersandbanks.

28]Icandebateeffec'velyonwhatcons'tutesvalueformoneyandtheeffectsofwas'ngmoney.

Cogni'veLearning

29]Icandescribehowbusinessandfinancialorganisa'onsaffectmydailylife.


31]Iunderstandandcanexplaintherela'onshipbetweenfinancialincomeandoutgoings.

32]IcandescribewhatbeingfinanciallyresponsiblemeanstomeandhowIwouldmanagemyownfinances.

33]Icanexplainthevalueofconduc'ngresearchtohelpmyselfandothersmakeinformeddecisionswhenbuyingproducts.

LearningtoLiveTogether

34]Icanexplainlegalandmoralconsequencesofnotpayingtaxes.

35]Icanexplainhowtaxescontributetothedevelopmentofgovernanceandpublicservices.

CareerPlanningandExplora'on

Cogni've

1]Icandiscusswheretoaccessinforma'onaboutdifferentjobs,professionsandcon'nuingprofessionaleduca'on.

3]Icanplananddiscusspossiblecareerop'onsandpaths.

4]Icanexplainwhypeopletakeupemployment.

Prac'cal17]Iamawareofmypost-secondaryop'onsandcanmakerealis'cchoicese.g.highereducaBon,vocaBonaltrainingandemployment.

� �51


CATEGORYB

HomeEconomics

Level7

FinancialLiteracy

Personal

1]Icandis'nguishbetweenbasicneedsandwants.

2]Icanexplaintheimportanceofsavingforapersonalproductorotheritemsandofspendingwithinone'smeans.

LearningtoBe3]Icanunderstandhowbudge'ngcanhelpinmakingbekerspendingandsaving.

ManagingLearning4]Icandrawupapersonalbudget.

5]Icanapplyabudgettoagivensitua'on.

Level8

FinancialLiteracy

LearningtoKnow

1]Icanexplaintheimportanceofbeinganinformedconsumer.

4]Icanexplaintheimportanceofsoundmoneymanagementandbudge'ng.

LearningtoBe

2]Iunderstandtherangeoffactorsthatinfluenceconsumerchoicesanddecisions.

12]Iunderstandthedifferencesbetweenplannedandimpulsivepurchasesandrelatedpoten'alhazards.

PlanningandReflec'on

3]Icandiscusstherightsandresponsibili'esofconsumers.Iknowthecourseofac'ontobetakenwhenseekingredress.

13]Icanlistanddiscussdifferentmethodsofpayment.

Personal5]Icanlistpossiblesourcesofincomeandofexpenditureforafamily.

SelfAwareness

6]Icanlistthepriori'estobeconsideredwhenplanningafamilybudget.

7]Iamawarethatfamilieshavedifferentfinancialresourcesandfamiliesonalowincomehence,havelimitedresourcesandchoices.

Collabora'on

9]Icanlistanddiscussthedifferentformsofadver'sing.

10]Icandiscusstheadvantagesanddisadvantagesofdifferenttypesofshopsandshoppingprac'ces.

Cogni've11]Icancompareproductsintermsofquality,quan'ty,priceandpackagingtomakethebestpurchase.

Crea'veLearning 14]Icanexplainwaysinhowcreditshouldbeusedresponsibly.

15]Iknowthedifferencebetweenvariousbankaccounts.

Level9

FinancialLiteracy

Cogni've1]Icaninves'gateandpriori'sethestepstofollowwhenpurchasingahome.

ListeningandSpeaking 2]Icandiscussinsuranceandassurance,givingexamplesofboth.

PersonalLearning 3]Icanexploreissuessuchasvalueformoney,loansanddebts.

� �52


Level10

FinancialLiteracyPersonalLearning

1]Iunderstandna'onalandEuropeanlegisla'onregardingconsumerrights.

2]Icandrawupabudgetforafamily,usingappropriatetools.

Prac'cal3]Icanprovideexamplesofdifferentpoliciessuchaslife,health,carandhouse.

CATEGORYC

Accoun*ng

Level9

AspectsofFinancialLiteracy

Prac'cal

1]IamabletoprepareaSalesInvoiceforitemsincurringan18%VATcharge.

2]Iunderstandthecivicandlegalresponsibilityofissuingandreques'ngVATreceipts.

3]Icandis'nguishbetweenthedifferentmethodsofcalcula'nglabourremunera'on,namelyflatrate,pieceworkand'merate.

4]Icanpreparesimplepayrollcalcula'onsthatincludetheemployer’sna'onalinsurancecontribu'on.

5]Icancalculatethenetwagesofworkersbydeduc'ngitemssuchasna'onalinsuranceandincometaxfromagivensetoffigures.

6]Iamabletofollowtheprocessinvolvedinpayrolltransac'onsusingcomputerisedaccounts.

7]Icanexplainthemeaningofaminimumwage,itscurrentvalueandthatitisperiodicallyadjusted.

8]Icanprepareasimplemonthlypersonalbudgettakingintoconsidera'onmyincome,projectedexpenditures,savingsconsidera'onsandanydebtrepayments.

Cogni'veLearning9]Icanadjustmymonthlypersonalbudgetinrela'ontoprojectedchangesinincomeorexpenditure.

ManagingLearning10]Icanconstructapersonalbudget,manually,throughappropriateso$ware.

LearningtoKnow11]Icaniden'fytheimportanceofcontribu'ngtowardssocialcausesthroughmyownincome.

Level10

AspectsofFinancialLiteracy

LearningtoBe1]Icandiscusstheimportanceofemployeesbeingpaidafairwage,onethatnotonlycoverstheminimumwage,butawagethatreflectstheworkthatisperformed.

Cogni'veLearning

2]Icaniden'fytheimplica'onsofdifferentmethodsofcalcula'nglabourremunera'onforboththeemployersandtheemployees.

3]Iamawarethatcertaincomponentsofabudgetareflexiblewhileothersarefixed,thustheneedtopriori'seneedsandwants.

� �53


BusinessStudies

Level8

FinancialandEconomicLiteracy

Crea'veLearning

1]Icanexplainhowtheunlimitedwantsofpeoplecausescarcityofresources.

2]Icandiscusshowscarcityaffectsthealloca'onofresourcesandtheopportunitycostofsuchchoices.

3]Icanunderstandtheopportunitycostresul'ngfromspecificbusinesschoices.

4]Icanlistandexplainthepersonalservicesthatacommercialbankhastoofferandthebenefitsofusingsuchservices.

5]Icandifferen'atebetweenpersonalincomeandpersonalexpenditure.

6]Icanprepareabankaccountorcashaccountusingtheconceptofmonetaryinflowandouplowandcanbalanceitoffperiodically.

7]Icaninterpretthetermsandfiguresinabankstatement.

8]Icanexplaintermsrela'ngtopersonalbudge'ngsuchasoverspending,saving,con'ngencyplanning,contribu'ngtowardsthecommunityandtheno'onofcredit.

9]Icanprepareapersonalbudgettakingintoconsidera'onmyexpectedincome,expenditureandanycreditrepaymentsthatImayhave.10]Icandiscusswhycertainbusinessriskshavetobetakenfrom'meto'me.

11]Icandis'nguishbetweeninsurableandnon-insurablebusinessrisks.

Level9

FinancialandEconomicLiteracy

1]Icanexplainthemeaningandimportanceofconsumerprotec'on.

2]Icancomeupwithexamplesofgood/badprac'cesrelatedtoconsumerprotec'on.

3]Iamawareofthepipallsofcredit.

Level10

LearningtoDo

1]Iamcri'calofthemis-distribu'onofworldresourcesresul'ngfrommarketforces.2]Icananalyseapersonalbudgetandiden'fyitsshorpallsandcomeupwithamoresensiblebudget.

� �54


CoreMathema*cs

Level7

Numbersystem Cogni'veLearning

1]Icanusewholenumbersinprac'calcontexts.

2]Icanrecogniseandworkwithdirectednumbersinreallifesitua'ons,includingtemperaturechanges.

3]Icandemonstrateanduseequivalencesbetweencommonfrac'ons,decimalsandpercentages.

4]Icanrecogniseandusenumericalpakerns.

Number–NumericalCalcula'ons Cogni'veLearning

1]Icanadd,subtract,mul'plyanddividewholenumbersusingarangeofstrategies.

2]Icanaddandsubtractdecimalsuptotwodecimalplaces.

3]Icanaddandsubtract,mul'plyanddividefrac'ons.

4]Icanmakecalcula'onsmentallyandon-paper.

5]Icanfindsimplepercentagesofwholenumberquan''es.6]Icanexpressaquan'tyasapercentageofanother.

7]Icanfindpercentageincreaseandpercentagedecrease.

8]Icanuseformulatoworkoutsimpleinterest.

9]Icanrecogniseandworkwithdirectednumbersinreallifesitua'ons,includingtemperaturechanges.

10]Icanwritera'osintheirsimplestform.

11]Icanusesimplemapra'os.

12]Icanworkthroughsimplesitua'onsthatinvolvedirectpropor'onusingtheunitarymethodincludingmoney,speeddistance,'me,weightandcapacity.

13]Icanworkwithquan''esinagivenpropor'on.

DataHandlingandChance

Crea'veLearning

2]Icanextractandinterpretinforma'onfromfrequencytables,diagrams,chartsandgraphs.

3]Icancollectandrecorddiscretedataandorganiseandrepresentinforma'onindifferentwaystosuitdifferentpurposes.

ManagingLearning

4]Icanfindandinterpretaveragesindifferentdatatocomparedistribu'ons.

5]Icanfindthemean,mode,medianandrangeinadataset.

Level8

Mathema'calApplica'on

Cogni'veLearning

1]Icanrepresentprac'calproblemsinfamiliarandunfamiliarcontextsmathema'cally,forexample,prac'calproblemsinvolvingbasicopera'onsforfrac'ons,percentagesanddecimalswithconver'ngbetweenallthree.11]Icanuseacalculatorandaspreadsheetfortediouscalcula'onsinvolvingwholenumbers,frac'ons,decimalsandpercentages.

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ThenewNCFunderlinestheimportancethatforthecurriculumtomeetit’sestablishedgoals,setforit,itisfundamentalthatprofessionalstaffissupportedtolearnthenewpedagogicalprac'ces.

Par'cularefforts,therefore,aretobemadetoinvolveteachersatallstagesoftheprocessandtoconvincethemoftheimportanceoffinancialeduca'onforstudentsandthemselves.Parents,too,shouldtotheextentpossible,becloselyengaged,throughdedicatedprogrammesandini'a'ves.Thereisnodoubtthatteachersaretobeprovidedwiththeresourcesandtrainingsothattheyfeelconfidentteachingfinancialeduca'oninclasses.Suchtrainingshouldbeinplaceforallteacherswhomaybeinaposi'ontodealwithfinancialeduca'onintheclassroom.Itshouldtakeplaceaspartoftheini'alteachingandcarriedonregularlyaspartofteachers’con'nuousprofessionaldevelopment.Themaingoalsofsuchtrainingshouldencompass:

• Raisingteachers’awarenessontheimportanceoffinancialeduca'on.• Providingteacherswithpedagogicalmethodsandteachingresources.• Developingteachers’ownfinancialliteracy.

Number–NumericalCalcula'ons

Cogni'veLearning

1]Icanworkthroughsimplesitua'onsinvolvingpercentageincreasesanddecreasesusingamul'plyingfactor.

2]Icanworkoutreversepercentagecalcula'ons.

3]Icanworkoutthenumberofrepaymentsneededtorepayaloan.

4]Icanworkoutcompoundinterest,apprecia'onanddeprecia'on.

5]Icanmakees'ma'onsandapproxima'ons.

6]Icanroundnumberstoaspecifieddegreeofapproxima'on.

7]Icancheckthera'onalityofresults.

8]Icanmakereasonableapproxima'onsandcanusetheseapproxima'onstocheckthecalcula'ons.

9]Icanuseroundednumberstocarryoutroughapproxima'ons.10]Icancalculateandconvertbetweencurrencies.

11]Icancalculatewithunitsofmeasurebetweensystems,usingconversiontablesandscales,andapproximateconversionfactors.

DataHandlingandChance Prac'cal

1]Icandesignasurveytogeneratequan'ta'vedata.

2]Icanconstructandinterpretahistogramwithequalintervalsfromagroupedfrequencytable.

3]Icancalculatethemean,mode,medianandrangefromafrequencytable.

4]Icancalculateandes'matethemean,iden'fythemodalclass,therangeandfindtheclassintervalinwhichthemedianliesforagroupedfrequency.

NumberSystem1]Icanuseideasofdirectandinversepropor'onincalcula'onsinspiredbyreal-lifeexamples.

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Addi'onally,availabilityof,andeasyaccesstoquality,objec'veandefficientmaterialandpedagogicalmethodsshouldbesecuredandac'velypromotedwithaviewtoofferteachersthebestresourcesonfinancialeduca'on.Suchtoolsshouldincludematerialsandresourcessuchasbooks,brochures,guides,on-linetools,casestudies,games,surveysandpedagogicmethods.Acentralportalshouldbeac'velypromotedtoteachersinState,ChurchorIndependentschools.BoxDbelowpresentsanexampleofoneofthenumerousfreewebfinancialeduca'onresourcesavailabletoteachers.

Finally,thedevelopmentofinterna'onalrecognisedguidelines,prac'cesandstrengtheningofpolicydialogueandcoopera'onontheexchangeofbestprac'ces,materialsandtoolswithotherjurisdic'onsisinstrumentaltotheefficientandsuccessfulintroduc'onandimplementa'onoffinancialeduca'oninschools.Suchguidelines,bestprac'ces,materialsandtoolscanhelpinvolvestakeholdersinaccelera'ngtheintroduc'onoffinancialeduca'oninschoolsasitallowsforthetappingintorelevantpreviousexperiencesandinterna'onallyrecognisedefficientprac'cesandtools.

Owingtotheirpedagogicexper'seandcloserela'ontostudents,teachersareatthecentreoftheintroduc'onoffinancialeduca'oninschools.Bethatasitmaythereismeritinnetworkingwithfinancialservicesprovidersandmanagementconsultancyfirmsfortheassignmentofvolunteersandotherexternalexpertstosupporttheteachingoffinancialeduca'on.

TheLearningOutcomesFramework(LOF)describedabovespansfinancialeduca'onacrossMathema'cs,Personal,SocialandCareerDevelopment,HomeEconomics,BusinessStudies,Accoun'ng,etc.Theimplementa'onoffinancialeduca'oninschools,therefore,requirescoordina'onandsupport.Thedesigna'onofa‘champion’forfinancialeduca'onisonepossiblesolu'ontorendertheteachingoffinancialeduca'onsustainable.

TheembeddingoffinancialeducationintheNCFshouldbesupportedbyanevaluationmechanismtogaugeitseffectiveness.Everythreeyears,theOECD’sProgrammeforInternationalStudentAssessment(PISA)evaluateswhetherteenagersarepreparedforfuturechallenges,havethecapacitytocontinuelearningthroughoutlife,andcananalyse,reasonandcommunicateeffectively.PISAassesses15yearoldsaroundtheworldtocharttheirabilitiesinreading,mathematics,andscience—skillsseenascriticalforsuccess.In2012,PISAaddedafinancialliteracycomponenttothesurvey,notingthatyoungergenerationsarelikelytohandlemorecomplexfinancialproductsandservicesthantheirparents.Maltadidnotparticipateinthe2012and2015PISAassessments.

Box D

Personal Finance Education Group: A trusted provider of knowledge, resources and support for anyone teaching children about financial education. PFEG forms part of Young Enterprise (UK), and “provides fantastic consultancy, engaging resources and innovative programmes to creatively enable the next generation to be financially savvy”.

http:// http://www.pfeg.org/

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Table 06: OECD PISA Financial Education Framework and Conceptual Mapping with Malta’s National Curriculum 40

FURTHERANDHIGHEREDUCATIONINCLUDINGVOCATIONALEDUCATION

Theneedforfinancial literacyeducationonfurtherandhighereducationcampuses (includingtheUniversityofMalta(UoM)iskeytothefuturefinancial healthandstabilityofyoungadults.Parentstoo make important financialdecisions regardingpost-secondaryeducation,includingwhethertosendtheirchildtoaprivateorStatesixthformeducationalinstitution. Moreover, it is infurtherandhighereducationthatyoungpeoplestartmaking financialdecisionsontheirown,includingthoseabouthousing(withparticularregard toGozitanstudentsfollowingpost-secondaryeducation inMalta),discretionaryspending,banking,andtheuseofconsumercredit.

DeliveredinMathema*cs

DeliveredinMathema*csandReinforcedinPersonal,SocialandCareerDevelopment

DeliveredinMathema*csandDevelopedinPersonal,SocialandCareerDevelopment

DeliveredinHomeEconomics

MoneyandTransac*ons

Everydaypayments,spending,valueformoney,bankcards,cheques,bankaccounts,currencies.

PlanningandManagingFinances

Measuresofincome,taxesandbenefits,budge'ng,planningahead,benefitsofmediumandlong-termsavingsandinvestments,buildinghumancapital,smoothingspendingthroughsavingandborrowing.

RiskandReward

Understandingwhysomefinancialproductsareriskerthanothers,limi'ngrisk,theroleofinsuranceproducts,credit,default,interestrates,exchangerates,marketvola'lity.

FinancialLandscape

Understandingthechoicesavailableandtheconsequencesoffinancialdecisions,rightsandresponsibili'es,redress,gebngadvice,consumerprotec'on,effectsofadver'singandpeerpressureonfinancialdecisions,scamsandfinancialcrime.

PlanningandBudge*ngResources&Use

Junioryears-promo'ngfinancialliteracyinprogrammesofferedattheHomeEconomicsSeminarCentre(HESC)onknowledgeandunderstanding,skillsandabtudestobecomefinanciallyliterateandresponsiblefromanearlyage,makeinformeddecisionswhenhandlingfinancialresources,beofposi'veinfluencewithintheirimmediatefamilyandamongstpeers.

Secondaryyears-includesunderstandingneedsandwants,incomevsexpenditure,moneymanagement,budge'ng,consumerchoices&decisions,rights&responsibili'es,redress,impulsepurchase,differentmethodsofpayment,amongstothers.

Pg34,FinancialEduca'onforYoungPeople,AllPartyParliamentaryGroup,201240

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Thenumberandcomplexityofsuchdecisionsunderscoretheneedandprovidesanimportant‘teachablemoment’toincreasethefinancialcapabilityofyoungadultsbyequippingthemwiththeinforma'on,resourcesandtoolstheyneedtomakesoundfinancialdecisionsbefore,during,anda$erakendingpost-secondaryeduca'on.Increaseduseofcreditcardsbystudents,forexample,hasgeneratedaconcernamongmanythatcreditcarddebtputsstudentsatgreaterrisktowardsfinancialproblemsa$ergradua'on.Creditcardsareasourceofdebtamongcollegestudentsandresearchoverseassuggeststhatcreditcarddebtislinkedtoincreasedstressandanxiety,whichinturnhasconsequencesforacademicperformanceandlong-termfinancialhealth.Suchresearchindicatesthatfinancialcapabilityandposi'veacademicoutcomesareo$encorrelated:studentswhoexhibitposi'vefinancialbehaviours,performbekeracademically. 41

Itis,however,likelythatalargenumberofstudentswhoenterpost-secondaryeduca'onins'tu'onssuchastheMaltaCollegeforArt,ScienceandTechnology(MCAST)ortheUoMareinadequatelyprepared,experiencedorknowledgeableonhowtomanagetheirmoney.

Whilstthestateofplayshouldchange,oncefinancialeducationisembeddedintheNCF,itisimportanttonotethatthis,currently,coversonlycompulsoryeducation.Indeed,atpresentatleast,theDQSEhaslimitedinfluenceonthepost-secondaryeducationcurriculum.Thus,focusingonimprovingthefinancialmanagementskills,attitudesandbehaviours,rightfromthestartoffurtherandhighereducation,isofsignificantimportance.

Buildingfinancialcapabilityisanimportantstrategyinpromo'ngnotonlyaccesstoandcomple'onofpost-secondaryeduca'on,butalsolifelongfinancialhealth .Asstudentsleavepost-secondaryeduca'onandmakethetransi'onto42

theworkplace,theyfaceanumberofimportantdecisionsforthefirst'me,includingcri'caldecisionsaboutemployment,savingforre'rement,managingcurrentexpensessuchaslivingexpenses,andwhetherandhowtomakelong-terminvestmentssuchasahomepurchase.Decisionsaboutwhichgoalstopriori'se-repaymentofaloanforthepurchaseofacomputeroracarorconsumerdebt,savingforemergenciesorassetpurchases,par'cipa'oninare'rementplan,etc.-haveimportantimplica'onsforanindividual’sfinancialtrajectory. 43

Possessingtheskills,informa'on,andtoolsnecessarytomakeeffec'vefinancialdecisionshelpsensurethatyoungadultsareabletomaketherightdecisionsastheybegintobuildtheirfinancialfutures .Toachievethis,however,the44

differenteduca'onauthori'esandins'tu'onsmustcometogethersothataseamlesspathwayforthecon'nuumoffinancialeduca'onfromcompulsorytohigherandfurthereduca'onisachieved.

Researchoverseasshowsthatthereisnosingularopera'onalmodelforapost-secondaryfinancialeduca'onprogramme.Theestablishmentofanexis'ngprogrammemodelsinhigherandfurthereduca'onisdrivenbyanumberoffactors.Theseinclude,theavailabilityofresources,suchasinternalorexternalfunding,'me,space,staffing,andlevelofstaffexper'se.TheCoali'onofHigherEduca'onAssistanceOrganisa'ons(COHEAO),FinancialLiteracyTaskForce,iden'fiesthefollowingasthemostprevalentmodelsinhigherandfurthereduca'onwhichhavebeensuccessful :45

Pg 8, Opportuni'es to Improve the Financial Capability and Financial Well-being of Post-secondary Students, U.S. Financial Literacy and41

Educa'onCommission,2015

Pg1,Ibid42

Pg11,Ibid43

Pg2,Ibid44

Alban, K., Brik, S., Durban, D., et al., Financial Literacy in Higher Educa'on: TheMost SuccessfulModels andMethods for GainingTrac'on,45

COHEAOFinancialLiteracyAwarenessWhitePaper,2014

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Interac*veOn-lineProgrammes

Thesecanbemul'mediaortext-based,andtypicallyincludeanassessmenttooltogaugelearning.Theiruseispopularwithlargeins'tu'onsthattrytoreachlargenumbersofstudentssincetheyarerela'velycostefficientandeasytoscale.Anotheradvantageisthattheseprogrammesareaccessible;studentscanlearnattheirownpaceandaccordingtotheirownschedule.Thebiggestdrawbacktointerac'veonlineprogrammesistheabsenceofhumaninterac'on,whichmakesitmoredifficulttoachievethedesiredlevelofengagement.Thisdrawbackcanbemi'gatedbyusingahybridmodelorincorpora'ngvideosofrealpeoplepresen'ngtheinforma'on.

ClassroomBasedProgrammes

Classroombasedfinancialeduca'oncomesinavarietyofforms.Themostcommonformisasemesterlengthcoursetaughtbyapersonalfinancialplanningorbusinessfacultymember.Anothercommonformofclassroombasedfinancialeduca'onisguestlecturesbyafinancialconsultant.Anadvantageoftheclassroomapproachistheabilitytoreachdozensofstudentsinarela'velycostand'meefficientmanner.Thebiggestdisadvantageistheneedforgenericversusindividualisededuca'on.

GameBasedEduca*on

Thepowerofsocialmediawithitsabilitytoprovideinstantcommunica'onenhancessocialinterac'on.Gamesestablishafunandinterac'vetonefortheclass.Games,however,aretoolswithinthelearningprocess,insteadofstand-alonesolu'ons.Aproperintroduc'onofobjec'vesanddebriefingiscri'caltomaximisetheeduca'onalvalueoffinancialgames.Thisprovidesthebridgebetweenthegameconceptsandtheirapplica'onintherealworld.Inotherwords,thefinancialgamesshouldassistandnotreplacetheinstructor.

Box E

Gen I Revolution: Game developed for Senior Secondary and Upper Secondary in the USA directed to give students the opportunity to learn important personal finance skills as they play and compete against fellow classmates. The game includes sixteen missions in which students attempt to help people in financial trouble.

http://www.genirevolution.org/

Visa Financial Football: A fast-paced, interactive game that engages students while teaching them money management skills. Teams compete by answering financial questions to advance and score. The questions are primarily scenario-based, which is appropriate for the coursework. There are three levels: Rookie (ages 11-14), Pro (ages 14-18), and Hall of Fame (ages 18+). VISAFinancial Football also has an iPad and an iPhone application.

http://www.financialsoccer.com/

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http://www.genirevolution.org/


TheG. F. Abela Junior Collegewithin theUoM provides no compulsoryor option subjects in retirement incomeand financial literacywhichstudentsfollowingdifferenteducationpaths(sciences,engineering,arts,etc.)canoptfor.

Studentsareexposedtosuchknowledgeonlyiftheychoosesubjectwhichhavefinancialeducationwithintheircurriculum-includingbutnotlimitedtoHumanEcology,Economics,Accounting,etc. When opportunitiesarisetheJuniorCollegefacilitatesoptionalseminarsandlecturesonfinancialeducation.ItisunderstoodthatthestateofplayattheMCASTisthesame.Churchandindependentschoolsthatprovide post-secondaryeducationwerenotapproachedinthedraftingofthisdocument.

EventBasedProgrammes

Specialeventsareanexcellentwaytoraiseawarenessandjumpstartavailableand/orplannedfinancialliteracyprogrammesandservices.Whileeventsaloneareusuallynotin-depthorlongenoughindura'ontohavemeasurableimpactonstudents’financialknowledgeandbehaviour,theydoprovideimportant‘mentalmoments’forstudentstoreflectontheirabtudes,spendinghabitsandlongertermfinancialgoals.Theyalsoofferanopportunitytosparkstudentinterestinseekingaddi'onalfinancialeduca'onandcounselling.

IndividualCounsellingInhigherandfurthereduca'onins'tu'onsofferindividualfinancialcounsellingtostudents,servicesaretypicallyprovidedbyprofessionalstaffmembersorstudentpeers.

Universi*esSimilartotheJuniorCollage,theUoMdoesnotprovidemodulesinre'rementincomeandfinancialliteracyknowledgethatisopentoallstudentsirrespec'veofthecareerpathwaytheyhaveselected.OnceagainitisonlythosestudentwhofollowadegreeinCommerce,Accoun'ng,Nutri'on,FamilyandConsumerStudiesamongstothersthatareexposedtofinancialeduca'on.Forexample,theB.Ed(Hons)degreeinNutri'on,FamilyandConsumerStudiesprovides3modulesinfinancialeduca'on:(i)familyresourcemanagement(includingfinancialmanagement);(ii)consumereduca'onandfamilybudge'ng;and(iii)consumer,financialsustainabilityeduca'on.

ChildrenandYouth

Therealityisthatcurrentandfuturechildrenandyouthwillspendmore'meon-line.Thiswillresultinsignificantincreasesine-commercepurchasesoncetheyhaveaccesstoacreditordebitcard.Withsmartmobiletelephonybecomingubiquitousamongsttoday’schildrenandyouththeincidenceofthemexposingtheirpersonalbankinginforma'onduetoalackofknowledgewithregardtoprotec'onmeasuresthatcanbeadoptedcanrenderthemincreasinglysuscep'bletoiden'tythe$oron-linefraud.

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AdultandCommunityEduca*on

Amongthecommonissuesthatmanyadultfacearethebalancingofthefamilybudgets,takingonamortgage,savingandinves'ngfortheirfamilyorpersonalgoals,assessingtheirinsuranceneedsastheirlifecircumstanceschange,protec'ngthemselvesagainstfinancialrisksandsetbackslikejobloss,andpreparingfortheirre'rement.GivenMalta’sextendedfamilyculturemanyadultssupporttheirchildrenandtheirelderlyparents.ManyMaltesecananddosaveandbuildassets,par'cularly,asshownearlierinthedocument,inresiden'alandsummerproperty.Theverylowinterestratesonsavingsandlongtermdepositsaswellaslimitedopportuni'estoinvestinsecuredbondsorinvestmentproductshasincreasedtheincidenceofpersonsinves'nginaddi'onalpropertyasa‘re'rement’fund.

Asshownpreviously,financialfirms,representa'vesofemployersandemployeesrespec'velyandemployersdoworktogethertoprovideworkplacesessionsandseminarsonfinancialeduca'on.Thereis,however,nostructuredoutreachprogrammesthataredirectedtowardsadults–whetherthistakesplaceattheworkplaceorinthelocalcommunity.Whensuchsessionsandseminarsdotakeplace,tooo$en,theyarespurredbythehumanresourcemanagementfunc'onorthetradeunionrepresenta'vesatthepar'cularworksite.

Thefinancialabuseofelderlypersonisseenasthe“Crimeofthe21stCentury”.Thereareseveralakribu'ngfactorstothisalarmingtrendiden'fiedintheliteratureincludingtherapidlyageingpopula'onindevelopedcountries,theincreasingwealthbutalsothevola'lityoftheeconomicclimateimpac'ngci'zens,andmorespecifically,thegrowingpopula'onofolderpeople,over20%ofwhowillexperiencemildcogni'veimpairment,whichcannega'velyimpactone’sdecision-makingabili'es.

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ItisimportantfortheCommissiontoworkwithfinancialserviceprovidersandotherrelevantstakeholderstoencouragethemtodevelopproductsdirectedatdifferentcohortofpersonsduringtheirrespec'velifecyclejourney–forexamplere'rementproductsthatare:

• Easytounderstandforchildrenandyouths(orforparentstoinvestontheirbehalf)thatfacilitateaccessandunderstandingaswellasencouragethemtomanagetheirmoneyresponsibly;or

• Productsthatmeetindividual’sneedsacrossdifferentstepsintheirlifejourney.

ThestrategyrecommendsthattheCommissionshould:

ElderlyandVulnerablePersons

Educa*on

Financialelderlyexploita'onmaybedefinedasthemisuseofaperson’sfundsandassets;obtainingpropertyandfundswithouthis/herknowledgeandfullconsentorinthecaseofanelderlypersonwhoisnotcompetent,andisnotinhis/herbestinterests.Ofpar'cularnoteisthattherearemorefemalethanmalevic'msandperpetratorsaretypicallyfriendsorfamilymembers.Thefactthatmorewomenthanmensufferabusereflectsthefactthatwomenlivelongerthanmenandconsequentlyaremorelikelytolivealone.Itistheircircumstancesthatmakewomenvulnerabletoabuse,nottheirgender.Researchsuggests,amongstothers,thefollowingasreasonswhyelderlypersonsarevic'ms

o Advancedage–75+.o Unmarried/widowed/divorced.o Cogni'veimpairment.o Lossofspouseordivorce.o Livingalone.o Socialisola'on.o Estrangedfromchildren.o Frailty.o Developingacaregiverrole.o Livingwiththevic'm.o Economicaldependentonthevic'm.o Healthproblems.o Dependentonachild/renorathirdparty.

Financialabuseislikelytosignificantlyimpactnotonlythefinancialsecurityofseniors.Addi'onally,thelossofafamiliarlifestyle,thebetrayalexperienced,withneitherthe'menortheopportunitytorecoverfinanciallyisprofoundforanolderadult.

ThisaspectofthestrategycomplementstheNa'onalStrategyforAc'veAgeingasfinancialeduca'onwithregardtore'rementincomeandfinancialliteracyposi'onsolderpersonsasac'veci'zensandnotjustusersofcareservices.

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Strands Ac*on

CompulsoryEduca*on

A1 TogetherwiththeDQSE,State,ChurchandIndependentschools,theMFSA,Educa'onConsulta'veCouncilandfinancialservicesprovidersworktoestablishaFinancialEduca'onFrameworkforre'rementincomeandfinancialliteracyandworkwiththeDQSEtomapandlinksuchaframeworkwiththeLOFoftheNCF.InthedesignoftheFinancialEduca'onFrameworklinksbetweencrosscurriculumareassuchasHomeEconomics,Mathema'cs,Personal,SocialandCareerDevelopment,English,op'onalandothersubjectswillbeexplored.

A2 Workwithparentorganisa'onsinthedesignoftheFinancialEduca'onFrameworktoiden'fythemostsignificant‘teachablemoments’forchildrentofocusonre'rementandfinancialliteracy.

A3 WorkwiththeMinistryforEduca'onandEmploymentsothatMaltapar'cipatesinthe2018PISAsurveytoassesstheleveloffinancialliteracyinMalta.

A4 UseinternalresourcesoftheDirectorateforEduca'onServicesaswellasthoseofassocia'onsrepresen'ngChurchandIndependentschoolsandofoverseasjurisdic'onstoestablishaportalthroughwhichprofessionalteachersandstaffcanaccess,atnocost,financialliteracyresourcesthatcanbecustomisedforlocaluse.

A5 AssisttheDirectorateforEduca'onServicesaswellasthoseofassocia'onsrepresen'ngChurchandIndependentschoolswiththeprepara'onandcon'nuedprofessionaldevelopmentofteachersteachingfinancialeduca'on.

A6 Workwithfinancialserviceprovidersandmanagementconsul'ngfirmsfortheiden'fica'onofvoluntarysupportfromstaffandexpertsinsuppor'ngtheteachingoffinancialeduca'oninschools

A7 WorkwiththeSECexamina'onboardstodetermineifandhowexamina'onques'onsinCoreanddesignatedop'onalsubjectsshouldincludefinancialeduca'on.

HigherandFurtherEduca*onincludingVoca*onalTraining

B1 WorkwiththeG.F.AbelaJuniorCollege,appropriateChurchandIndependentschoolsandexamina'onboardstodeterminetheappropriatemodel/stobeintroducedforstudentsinhighereduca'onandsubsequentlyassistthemintheimplementa'onofthesaidmodel/s.

B2 WorkwithMCASTto:

a.Determinetheappropriatemodel/stobeintroducedforMCASTstudentsandsubsequentlyassistthemintheimplementa'onofthesaidmodel/s.b.Assesstheop'onofintroducingNVQaccreditedprogrammesrelatedtofinancialeduca'onaspectsandiden'fyappropriatepathways.

Universi*es C1 WorkwiththeUoMandotheruniversi'estodetermineappropriatemodel/stobeintroducedforstudentsinfurthereduca'onandsubsequentlyassistthemintheimplementa'onofthesaidmodel/s.

ChildrenandYouths

D1 Workwiththefinancialsectorandotherrelevantstakeholderstointroduceandraiseawarenessofresourcesavailabletohelpchildrenandyouthprotectthemselvesfromfraud,scamsandiden'tythe$aswellastoprotecttheirbankinginforma'on.

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D2 Partnerwithins'tu'onssuchasVISAtotapintotheirfreegamebasedfinancialeduca'onprogrammes.

D3 Specificallytarget18-24agedyouthsonre'rementplanninggiventhesearealikelytargetshouldanautoma'cenrolmentpensionschemebeintroduced.

D4 Workwiththefinancialsectorandotherrelevantstakeholderstoencouragethemtodevelopnewproductsfordifferentcohortsofthepopula'on.

AdultandCommunityEduca*on

E1 Adoptalife-cycleeventapproach,bywhichindividualsandhouseholdsaretargetedatdefiningmomentsoftheirfinanciallife,inordertoaddressspecificfinancialeduca'onneeds.Thesestagescancoversavingsforpost-graduatestudies,gebngmarried,buyingahouse,divorcing,havingchildren,re'ringorbecomingunemployed.

E2 Teamupwithunionsandemployersandins'tu'onssuchastheMaltaIns'tuteofAccountantstodesign,buildcapacityandensurethedeliveryofworkplacere'rementandfinancialliteracyprogrammesonmakerssuchas:-360odegreesofFinancialEduca'on–focusingonpersonalfinances,moneymanagementskills,andplanningforre'rement.-Understandingone’sStatepension.-MyCredit–focusingonallthingsrelatedtocredit,suchaschoosingcreditcards,ra'ngs,interest,the$,etc.oMyRe'rement–focusingonre'rementplanning,risks,lifechoices,etc.

E3 TeamupwiththeLocalCouncilsAssocia'ontodesign,buildcapacity,andensurethedeliveryofcommunitybasedre'rementandfinancialliteracyprogrammessuchastheexamplesshownabove.

E4 WorkwiththeEmploymentandTrainingCorpora'ontoembedre'rementandfinancialliteracywithinexis'ngandnewtrainingprogrammes.

ElderlyandVulnerablePersonsEduca*on

F1 WorkwithNGOstopromoteresearchtoincreasetheunderstandingofthediverseneedsofelderlypersonswithregardtofinancialeduca'onandliteracy,andtheeffec'venessofdifferentapproachesthatcanbeadopted.

F2 Workwithelderlypersons,aswellascaregivers,nursesanddoctors,tounderstandthepoten'alneedsrela'ngtomanagingfinancesforthosewhoexperiencelossofcogni'veabilityandiden'fyand:-Designandimplementtrainingprogrammesfordifferentstakeholders(financialservicesemployees,familymembers,doctors,nurses,socialcarers,etc.)-Designanddisseminateinforma'onleafletsandotherappropriatetools.

F3 Workwithstakeholderswhoareuniquelyposi'onedtoiden'fyandredflagfinancialabuseamongsttheelderlyand:-Designandimplementtrainingprogrammesfordifferentstakeholders(financialservicesemployees,familymembers,doctors,nurses,socialcarers,etc.)-Designanddisseminateinforma'onleafletsandotherappropriatetools.

F4 WorkwithNGOs,financialins'tu'onsandappropriategovernmenten''esonwhoandhowadvocacyservicesaretobeprovidedtoelderlypersonswithregardtofinancialabuse.

F5 Carryoutgeneralawarenessandeduca'onprogrammestarge'ngdifferentformsoffinancialabuseandbehaviouralchangesthatshouldbelookedoutfor.

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3.6 Provision of Trusted and Independent Information to Change Behaviour and the Introduction of Programmes directed to Inculcate a Culture for Saving

Therearefourmainchallengesrelatedtore'rementincome.Thefirstisthelackofinterestinthetopicforalargepartofthepopula'onespeciallytheyoung.Noneoftheyouthorganisa'ons,includingtheNa'onalYouthCouncil,par'cipatedinthepublicconsulta'onprocessrelatedtothe2015pensionreforms.Thesecondistheperceivedoractualcomplexityofthetopic.Thisisnothelpedbythefactthatwhendiscussiononthepensionsystemoccursacrossdifferentmediathis,tooo$en,tendstobetootechnicaland,thus,fartoocomplexforthegeneralpublic.

Third,aspreviouslydiscussed,isthelowleveloffinancialawareness,literacy,capabilityandresponsibilityofconsumers,especiallyamongthemorevulnerablegroups.Finally,discussiononpensionreformandtheStatepensionisnotaseamlessprocessthataffectsallpersonsinthesamemanner.Rather,theexpecta'onsofyoungerpersonstendtobedifferentfromthoseofpersonswhoareabouttore'reorhavere'red.TheimpactsoftheStatepensiononwomenaredifferenttothoseonthemalecounterparts.Theexpecta'onsofhighincomeearnersarediversefromthoseoflowincomeearners.Todatetherehas,however,beennocoherentcommunica'onsstrategythatextendsbeyondexplainingreformsunderwayanddirectedtosecureconsensusforreform(2004and2015)andtoraisepublicknowledgeand,amongstothers,to:

• Explain the individual choices and the poten'al implica'ons such choices have on their financial well-being inre'rement.

• Explaintheinvestmentandsavingsinstrumentsavailabletosecurefinancialwell-beinginre'rement.

• Explainhowsavingsand investmentsbehave indifferenteconomiccyclesandthe implica'onsthesemayhaveontheaccumulatedwealthonthedateofre'rement.

• Facilitatetheindividual’sac'veandinformeddecisions.

• Encouragespecificbehavioursuchassavingsinvoluntaryprivatepensionschemes.

• Postponere'rement.

Althoughitiswellrecognisedthatfinancialwell-beinginre'rementdependslargelyondecisionsandsavingsbehaviourmademuchearlierinlife-sustainedre'rementeduca'onbyDSSisnotasaggressiveasmanywishittobe.ThekeymediumthatDSScurrentlyusestoexplainsocialsecuritybenefits,includingtheStatepension,istheradioandTV,whereweeklyprogrammesarepresented.Theseprogrammesaremainlystructuredonaques'onandanswerbasis,wherepeoplefieldques'onsontheirpersonalsitua'onandDSSspecialistsrespondtosuchqueries.

Whilstnoempiricaldataisinhand,itissafetoconcludefrominterven'onsinthemedia,aswellasques'onsraisedwithDSS,thatalargenumberofpeopledonotunderstandhowtheStatepensionworksandthepensionincomeittranslatestoonre'rement.Tothisdate,contributorsdonothavereal'meaccesstotheircontributoryhistoryandtothere'rementincometheywillreceiveifthesamecontributorytrajectoryismaintained–thoughthisisplannedtobeintroducedbyDSSin2016.

TheMFSAhasaportal'tledwww.mymoneybox.com.mt,thatisdirectedtoposi'onitasaleaderinpromo'ngfinancialliteracy.Thewebsiteprovidesinforma'onwithspecificregardtobanking,investmentsandinsuranceaswellascalculators,ques'onsandanswers,etc.Furthermorethewebsiteincludesspecificinforma'onrelevanttodifferentlifestagesconsumersgothroughincludingsec'onson‘youngadulthood’.TheMFSA‘mymoneybox’portalalsoincludesmaterialprovidingteachers,whoareseenastheclosestinfluen'alfigurestoastudent,withadedicatedteachers’cornertoassistthemintheteachingprocess.

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http://www.mymoneybox.com.mt


Thereisnostructuredinter-rela'onshipbetweenthebroaderfinancialliteracy,agendathat,toadegree,isrepresentedbytheMFSAandtheunderstandingoftheStatepension(akainingtheappropriatebalancebetweenpre-andpost-employmentincomeandthequalityoflifesoughtinre'rement).Thedesignofacommunica'onsstrategyonre'rementincomeandfinancialliteracybasedonsoundbehaviouralchangeprinciples,iskey.Themessageonre'rementincomeandfinancialliteracyshouldbetwo'ered:

• Themedtoembracethegeneralpopula'ontarge'ngdifferentlifecycleeventsthatimpactonanindividual’sorhousehold’sfinancialsitua'on:buyingacar,buyingahouse,inves'ngineduca'on,etc.

• Targetedtoengageandrespondtopersonswithdifferentdemographic,behaviouralandlabourmarketprofiles.

Thecommunica'onsstrategyshouldbesupportedbythenecessaryfinancialandhumancri'calmasssothatasustainedmomentumoveraperiodofthreeyearsisreached.Therehas,todate,beennothoroughna'onalsurveythatiden'fiesMalteseci'zen’sunderstanding,knowledgeandprepara'onwithonre'rementincomeandfinancialliteracy.WithregardtotheformertheclosestundertakingwasthecarryingoutoftwosurveysbyNSOonbehalfofthe2004and2010PWGrespec'vely.Thesurveysshedsomeunderstandingonpeople’spercep'ononpensionsandpensionreform.WithregardtothelakeritisencouragingtonotethatanumberofBachelorandMasterprogrammedisserta'onsbyMaltesestudentshavestartedtoresearchfinancialliteracyinpar'cular.

Theakainmentofempiricaldatathroughacomprehensivena'onalsurveyisofkeyimportance,asitwillprovideuniqueinsightstoiden'fythelevelsofre'rementandfinancialknowledge,abtudes,andbehavioursofpersons.Inpar'cular,suchana'onalsurveywillhighlightbehaviourandpriori'esonre'rementplanningandaccesstofinancialproducts,credit,savingsandinvestments.Theprovisionofsuchinforma'onensuresthatthecommunica'onsstrategyandotherac'onsproposedbythisstrategywillhavetargetedclearandmeasurableobjec'vesthatwillresultinposi'veoutcomes.

TheStrategyshouldembracethebroadestofcommunica'onchannels–fromdigitalcommunica'onsandsocialmediatoembracetheyoungergenera'ontotheradiotoengagethenonICTorliteratepersons.Addi'onallythecampaignshouldengagepeoplethroughoutreachprogrammesandroadshows,seminarsandworkshopsheldbothatana'onalandlocalcommunitylevel.

Thecommunica'onsstrategyshouldnotcompetewiththeeduca'oncampaignoftheMFSAandthemarke'ngandeduca'oncampaignsoffinancialserviceproviders.Ratherthestrategyshouldseektoestablishaprogrammeofcoordinatedac'vitybetweenallstakeholders.

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TheCommission,theMFSAandDSSshouldjoinforcestoestablishMFSA’swww.mymoneybox.com.mtastheprimaryportalthatactsastheofficialchannelfortrusted,accurate,andaccessibleinforma'on,presentedintheleasttechnicalmannerpossibleandinanakrac'vemannerthroughresourcessuchasfinancialeduca'ontoolsincluded,butnotlimitedtogames,toakractthechildrenaswellasadults.

Yet,simplyprovidinginforma'ononitsown,evenifitimprovesknowledgehasalimitedimpactonchangingpeople’sbehaviour.Overseas,anumberofprogrammesdesignedtoovercomebehaviouralbiasesweresuccessfullyembarkedupontocomplementcommunica'onstrategies.Thefollowingarebehaviouralini'a'vesthatwereintroducedtoovercomeiner'aandnudgepeopleintoafinancialdecision,tomakesavingmoreinteres'ngorakrac've,ortoencouragepeopletocon'nuesaving:

• ‘Payyourselffirst’,asimplementalremindertoputmoneyintosavingsbeforespending.

• ‘Roundingup’-savingatthesupermarketorotherretailoutletbyroundingupthebilltothenearest€1/€5,andpubngthesparecentsintoasavingsaccount.

Itisimportanttounderlinethat,ingeneral,behavioural‘nudges’donotenhancefinancialliteracy.Policiesbasedonbehaviouraleconomicsassumethatpeopleo$enmakethe‘wrong’decisionsandneedforcingor‘nudging’tothe‘right’decision.Thissuggeststhatpolicydesignersdeterminewhattherightdecisionisforindividualsorgroupsofpeople.Thus,behaviouralinterven'onsshouldcomplementandnotsupplementfinancialeduca'onini'a'ves.

Asstatedearlier,youthshavehardlyengagedinthepensionreformini'a'vesoverthepastdecade.Thisisofconcerngiventhatthemainthrustofsuchreformsrelatesdirectlytothem–newandrecententrantsintothelabourmarketwhore'rein45years’'me.Theabsenceofyouthsinthediscourseonpensionreformresultsinastateofplaywheretheagendaofchangeisdeterminednotbytheyouths–thepeopleaffected–butbyotherorganisa'onsthatmayhavedifferentandseparateagendastopursue.

Example of Behaviour Targeted Saving / Investment Programmes Box F

The Save More Tomorrow (SMarT) programme in the USA targets the following behavioural biases: hyperbolic discounting, loss aversion, and inertia. The programme was designed on the basis of the following rules:

Behavioural Bias How it is addressed

Hyperbolic discounting Employees are approached about increasing their contribution rates to a voluntary pension scheme a considerable time before their scheduled pay increase. Because of hyperbolic discounting, the lag between the sign-up and the start-up dates should be as long as feasible.

Loss aversion If employees join, their contribution to the plan is introduced following the first pay cheque after a raise. This feature mitigates the perceived loss aversion of a cut in take-home pay.

Inertia / Status Quo The contribution rate continues to increase on each scheduled raise until the contribution rate reaches a pre-set maximum. In this way, inertia and status quo bias work toward keeping people in the plan.

Comfort and choice The employee can leave at any time.

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http://www.mymoneybox.com.mt


Aspersonsage,theyfacedifficultfinancialdecisionsanduniquechallengesrelatedtomanagingtheirmoney–includingthetransi'onfromworktofullorpar'alre'rement.Elderlypersonswhohaveaccumulatedsavingsmustdecidehowbesttoturnsuchsavingsintoincomethatwilllastfortheirlife'measlongevityincreases.Formostre'rees,accessinginforma'oncons'tutesachallenge.

Badornoplanningforre'rementislikelytoresultinastateofplaywherepensionerswillhavelimitedfinancialabilitytodealwitharisingissues.Whilstnoempiricaldataexistslocally,experiencesinothercountriesshowthatpensionersdonotunderstandthedetailsofgovernmentprogrammesthatsupportelderlypersons.Tomakeappropriatedecisions,theMalteseneedtounderstandandaccessgovernmentservicessuchasIl-KartaAnzjan,thecommunityservices,healthservices,etc.,sothatallsuchincomeorin-kindbenefits,fitintotheiroverallre'rementincome.

Itisimportantthatthestrategyandthevariousini'a'vesandac'ons,arisingfromit,aremonitoredonanon-goingbasissothatpolicyandprogrammemeasuresareassessedwithregardtooutcomeandoutput,lessonsarelearnt,andthattheyarefurtherbuilton,improvedorrolledbackasthecasemaybe.

Thestrategyrecommendsthatitshould:

3.7 Work in Partnership to Strengthen the Connections between all Parties Involved in Retirement Income and Financial Literacy

Thisstrategydocumentispremisedontheprinciplethatpartnershipsamongstactorsinvolvedinre'rementincomeandfinancialliteracyisfundamentaltoitssuccess.Thevisionofstrengtheningre'rementincomeandfinancialliteracyamongstMalteseci'zensisasharedresponsibilityamongmanystakeholders.Thevisionwillnotberealisedwithoutthecombinedeffortsofindividuals,families,Government,localcommuni'es,financialservicesproviders,employers,labourorganisa'ons,businessesandNon-GovernmentOrganisa'ons(NGO),etc.

Indeed,allofthekeyactors,arelikelytobenefitasaresultofastrategyonre'rementincomeandfinancialliteracythatisunderpinnedbytrust.Ifsuccessful,peoplewillbebeker-informedofwhattheirre'rementincomewillcons'tutevis-à-vistheirexpecta'ons,ofimproveddecision-makingonsavingsandinvestments,ofreducedregulatory

Strands Ac*on

Na*onalSurvey G1 Undertakeacomprehensivena'onalsurveyonre'rementincomeandfinancialliteracybasedontheOECDsurvey.

Communica*ons H1 Designonsoundbehaviouralchangeprinciplesandimplementathreeyeartargetedcommunica'onstrategydirectedtodeliverclearmessagestodifferentcohortsofthepopula'onbasedondemographic,abtudinalandlabourmarketprofiles.

H2 Implementtargetedcommunica'oncampaigns.H3 Designanevalua'onmechanismtogaugethesuccessofthestrategy.

Trustedportal I1 TogetherwithGovernmentandtheMFSAestablishaportaldesignedtoprovideofficialtrustworthy,mo'va'ngandaccessibleinforma'ondirectedtohelppersonsprepareforre'rementandmakefinancialdecisionsthatimprovetheirlives.

Targe*ngPensioners J3 WorkwiththeDepartmentofSocialSecuritysothatworkersreceiveonceayear,oraccesson-line,astatementshowingcontribu'onspaidandthepensiontheyareen'tledtoifsuchacontributorytrajectoryismaintained.

J4 WorkwiththeDepartmentofSocialSecurity,MFSAandotherstakeholderstohelpensurethatpersonsareawareofandhaveaccesstoeffec'vefinancialeduca'on,tools,informa'onandassistancerela'ngtotheStatepension.

J5 Workwithgovernmentandcivilsocietytoestablishaprogrammethathelpsensurethatpensionersareawareandaccessthegovernmentbenefitstheyareen'tledto.

J6 Workwithstakeholderstodevelopeffec'vefinancialconsumerinforma'onprotec'ontoolsthatcanaccompanyre'rementincomeandfinancialliteracyini'a'ves.

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ac'onandlossoftrustinfinancialserviceprovidersduetomis-selling,fraudandabuse.Addi'onally,suchanapproachismorelikelytoresultinacollabora'vepartnershipthatallowsconfidencetobuildasthepar'esworktogether,exploreemergingtrends,generatenewideasandachievebekerunderstandingofthechallengesandissuesfacedbyoneanother.

Furthermore,aneffec'vepartnership,shouldresultinanon-goingandsystema'cliaisonandconsulta'onandthecon'nuousandefficientsharingofresources,inpar'cularoninforma'on,learningandresearch.Thisdocumentthroughout,underlinestheimportanceofpartnerships–whetherthisiswitheduca'onauthori'esopera'ngwithincompulsoryeduca'onorhigherandfurthereduca'onorinthesphereofyouthorganisa'onstoengageyoungMalteseci'zensinmakersrelatedtore'rementincomeandfinancialliteracy.

Thus,forexample,inmovingforwardtherecommenda'onsonfinancialeduca'on,theCommissionwillworkwith,andthrough,theMFSAECC.

Privatefinancialservicesprovidersandfinancialservicesassocia'onsareac'velyinvitedtopar'cipateinthereviewandimplementa'onofthestrategy.Addi'onally,theCommissionwillbroadenitspartnershiprela'onshipsbyestablishingaConsulta'veCouncildirectedtoinvolveinitsworkabroaderspectrumofstakeholderssuchasemployeerepresenta'ves,employerrepresenta'ves,civilsociety,etc.TheConsulta'veCouncilwillprovideon-goingguidanceandfeedbacktotheCommissionontheimplementa'onandevalua'onoftheStrategy–including:

• Howtoop'misetheoverallreachandimpactonMalteseci'zens.

• Howtoleveragepartnershipsandprogrammesforgreaterbenefit.

• Howtofine-tuneandadapttheStrategyonthebasisofprogressmeasurementindicators.

TheConsulta'veCouncilandtheCommissionwillexchangeideasandfeedbackandtakeastrategicviewofre'rementplanningandfinancialliteracyissuesand,thus,would:

• Generatewiderstakeholderinterestandengagement.

• Provideadedicated,on-goingforumforcommunica'onandinterac'onamongststakeholders.

• Enablestakeholderstobeac'veindialogueandac'onarisingfromtheStrategy.

• AllowfordiverseviewstobeincorporatedintheStrategy’sexecu'on.

• Promotegreatercollabora'on,coordina'on,efficiencyandrela'onshipsacrosssectors.

TheCommissionwillsynergisewithnetworkssuchastheIFIEandtheINFEaswellassimilarcommissionsoverseastobenefitfrombestprac'ceandtotapintoresearch,toolsandmaterialsintroduced.

TheStrategyrecommendsthattheCommissionshould:

Strands Ac*on

Partnerships K1 Securetheac'veinvolvementoftheprivatesectorinthereviewandimplementa'onofthestrategy.

K2 EstablishaConsulta'veCouncildirectedtoinvolveintheworkoftheCommissionabroadspectrumofstakeholderssuchasemployeerepresenta'ves,employerrepresenta'ves,civilsociety,etc.

L1 Par'cipateac'velyininterna'onalforumsuchastheInterna'onalForumforInvestorEduca'onandtheInterna'onalNetworkonFinancialEduca'on.

L2 Establishcontactswithsimilarorganisa'onsincountriesoverseastotapintotheirexperiencesandknowledgebase.

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� �71

Realising the National Strategy for Retirement

Income and Financial Literacy Chapter 04


4.1 Financing the National Strategy for Retirement Income and Financial Literacy

ForthisStrategytoberealised,anannualstructuredbudgetisnecessaryto:

• Undertakesurveysandresearch.

• Designandimplementprogrammesandini'a'vesincludingtools,materials,media,etc.includingdigitalmediaandcommunica'ons.

• Implementac'onsiden'fiedinthisstrategy.

• Ac'velypar'cipateininterna'onalfora.

• Establishsynergieswithsimilaren''esinoverseasjurisdic'ons.

• Establishasmallsecretariattosecuresustainedmomentumintheworkofthecoordina'ngvehicle.

The Strategy proposes that the budget for the coordina'ng vehicle should be cons'tuted ofmonetary and in-kindsupportfromstakeholdersthatmayincludethefollowing:

StructuredYearlyContribu*on

TheMinistryforFamilyandSocialSolidarity

TheMaltaFinancialServicesAuthority

TheCentralBankofMalta

NonFinancialBenefitsorIn-KindSupport

FinanceMalta

MaltaBankers’Associa'on

MaltaInsuranceAssocia'on

MaltaIns'tuteofAccountants

Na'onalLokeriesGoodCausesFund

ChamberofCommerce,EnterpriseandIndustry

MaltaEmployers’Associa'on

GeneralRetailers’andTraders’Union

GeneralWorkers’Union

UnionĦaddiemaMagħqudin

MembersandAffiliateMembers

Privatesectorprovidersinaccoun'ng,banking,financial,fundadministra'on,insurance,investment,law,managementconsultancy,pensions,fiduciaries,taxservices,etc.

Other EuropeanSocialFundandotherfinancinginstruments

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Thecontribu'onfromtheMinistryforFamilyandSocialSolidarity,theMinistryforFinance,andtheMinistryforEduca'onandEmploymentcanincludebutnotbelimitedto:

• Theassignmentofappropriatestaffmemberstosupportthecoordina'ngvehicle.

• Theprovisionofadequatepremises,furnishingsandequipment.

• Thealloca'onofasmallbudgettokickstarttheset-upofthecoordina'ngvehicleandtogetintoplacethefundingstreamsproposedabove.

4.2 Implementing the National Strategy for Retirement Income and Financial Literacy

Thefollowingimplementa'onac'onplanisproposed.

4.2.1 Implementation: 2016 ACTION


A1 Ini'ateworkonaFinancialEduca'onFramework

A3

WorkwithparentorganisationsinthedesignoftheFinancialEducationFrameworktoidentifythemostsignificantteachablemomentsforchildrentofocusonretirementandfinancialliteracy.

A4Ini'atebuildingofasingleportalprovidingteachingresourcestoteachersinState,ChurchandIndependentschools.

B1

WorkwiththeG.F.AbelaJuniorCollege,ChurchandIndependentschoolsandexamina'onboardstoiden'fyappropriatemodel/sforstudentsandimplementasappropriate.

B2aWorkwiththeMaltaCollegeofArts,ScienceandTechnologytoiden'fyappropriatemodel/sforstudentsandimplementasappropriate.

C1WorkwiththeUniversityofMaltaandotheruniversi'estoiden'fyappropriatemodel/sforstudentsandimplementasappropriate.

D2Partnerwithins'tu'onssuchasVISAtotapintotheirfreegame-basedfinancialeduca'onprogrammes.

D3Specificallytarget18-24agedyouthsonre'rementplanninggiventhesearealikelytargetshouldanautoma'cenrolmentpensionschemebeintroduced.

E2Designadultandcommunityfinancialeducationprogrammescoveringdifferentlife-cyclestages.

E3Teamupwithunionsandemployersandinitiateat-workfinancialeducationprogrammes.

E4TeamupwiththeLocalCouncilsAssociationandlocalcouncilsandinitiatecommunity-basedfinancialeducationprogrammes.

F1

WorkwithNGOstopromoteresearchtoincreasetheunderstandingofthediverseneedsofelderlypersonsforfinancialeduca'onandliteracy,andtheeffec'venessofdifferentapproachesthatcouldbeadopted.

F5Carryoutgeneralawarenessandeduca'onprogrammestarge'ngdifferentformsoffinancialabuseandbehaviouralchangesthatshouldbelookedoutfor.

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ACTION


INFORMATIONPROVIDER

G1 Undertakeacomprehensivena'onalsurveyonre'rementincomeandfinancialliteracy.

H1 Designa3-yearcommunica'ontarge'ngdifferentpopula'oncohorts.

H2 Implementiden'fiedtargetedcommunica'onscampaigns.

H3 Designanevalua'onmechanismtogaugethesuccessofthecommunica'onsstrategy.

I1TogetherwithGovernmentandtheMFSAestablishaportaldesignedtoprovideofficialtrustworthy,mo'va'ngandaccessibleinforma'on.

J4

WorkwiththeDSS,MFSAandotherstakeholderstohelpensurethatpersonsareawareofandhaveaccesstoeffectivefinancialeducation,tools,informationandassistancerelatingtotheStatepension.

J5WorkwithGovernmentandcivilsocietytoestablishaprogrammethathelpsensurepensionersareawareandcanaccessGovernmentbenefitstheyareen'tledto.

ACTION

THRUST3:STRATEGICPARTNER K1

WorkwiththeMFSAEduca'onConsulta'veCouncilonthedesignoftheFinancialEduca'onFramework.

K2EstablishaConsulta'veCouncildirectedtoinvolveabroaderspectrumofstakeholderssuchasemployeerepresenta'ves,employerrepresenta'ves,civilsociety,etc.

L2Establishcontactswithsimilarorganisa'onsincountriesoverseastotapintotheirexperiencesandknowledgebase.

4.2.2 Implementation : 2017 ACTION


F1 CompleteworkontheFinancialEduca'onFramework.

A3Ini'atepreparatoryworkwiththeMinistryforEduca'onandEmploymentforpar'cipa'oninthe2018PISAsurvey.

A4Con'nuewiththebuildingofasingleportalprovidingteachingresourcestoteachersinState,ChurchandIndependentschools.

A5Designandimplementaframeworkofhowtoassistschoolswiththepreparationandcontinuedprofessionaldevelopmentofteachersteachingfinancialeducation.

A6Workwithfinancialserviceprovidersfortheiden'fica'onofvoluntarysupportfromstaffandexpertsinsuppor'ngtheteachingoffinancialeduca'oninschools.

B2bWorkwithMCASTtoassessthepossibilityofintroducingNVQaccreditedprogrammesrelatedtofinancialeduca'onaspectsandiden'fyappropriatepathways.

D1Workwiththefinancialsectorandstakeholderstointroduceandraiseawarenessofresourcesavailabletohelpchildrenandyouthprotectthemselvesfromfraud,scamsandiden'tythe$,etc.


E2Con'nueimplemen'ngadultandcommunityfinancialeduca'onprogrammescoveringlife-cyclestages.


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E5WorkwiththeEmploymentandTrainingCorpora'ontoembedre'rementincomeandfinancialliteracywithinexis'ngandnewtrainingprogrammes.

F2Workwithelderlypersons,aswellascaregivers,nurses,anddoctorstounderstandthepoten'alneedsrela'ngtomanagingfinancesforthosewhoexperiencesomelossofcogni'veability.

F3Workwithstakeholderswhoareuniquelyposi'onedtoiden'fyandredflagfinancialabuseamongsttheelderly.

ACTION


INFORMATIONPROVIDER

H2Con'nuetoimplementiden'fiedtargetedcommunica'onscampaigns.

J3WorkwithDSSsothatpeopleaccesson-lineastatementshowingcontributionspaidandtheprospectivepensionentitlement.

J6Introduceevaluationmechanismstogaugetheimpactofmeasuresintroduced.

ACTION

THRUST3:STRATEGICPARTNER L1

Par'cipateac'velyininterna'onaleventssuchastheInterna'onalForumforInvestorEduca'onandtheInterna'onalNetworkonFinancial.Educa'on.

4.2.3 Implementation : 2018ACTION


F1 MapandcompletelinkingoftheFinancialEducationFrameworkwiththe learningoutcomesframeworkoftheNationalCurriculum.

A3 Par'cipateinthe2018PISAsurvey.

A4 Con'nuewiththebuildingofasingleportalprovidingteachingresources toteachersinState,ChurchandIndependentschools.

A5 Maintainandimprovetheframeworksupportingschoolswiththe professionaldevelopmentofteachersteachingfinancialeduca'on.

A7 Work with the SEC examina'on boards todetermine if and how examinationques'onsinthecoreanddesignatedop'onalsubjectsshouldinclude financialeduca'on.

A8 Workwiththeuppersecondarycurriculumownerandappropriateexamina'onboardstodetermineifandhowexamina'onques'onsonfinancialeduca'onaretobeincorporated.

G1 Work with the financial sector and other relevantstakeholders to encouragethemtodevelopproductsthatareeasy tounderstandfor childrenandyouththatallows access as well as encourages them tomanage their moneyresponsibly.


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F4 WorkwithNGOs,financialins'tu'onsandappropriateGovernmenten''esonadvocacyservicestobeprovidedtoelderlypersonsonfinancialabuse.

ACTION

THRUST3:STRATEGICPARTNER H2 Con'nuetoimplementiden'fiedcommunica'onscampaign.

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