If we wrote a book about the Malta U.S. Pension Scheme it would be about 12 pages even if we covered everything imaginable in great detail…otherwise it would be a couple of paragraphs and not worthy of a white paper because it is NOT an occupational retirement plan it is a life time annuity with a retirement scheme label on it.
A comparison chart versus other financial entities would be 3 columns wide and 3 lines items in length; which means that it doesn’t even come close to being a competitor to our style of recognized occupational retirement plan solution (Hong Kong ORSO Pension Law).
It has one advantage over our IRC 402(b) solution; the Malta scheme because it is worth less it has fewer benefits available for marketing purposes. Meaning it is simple.
It is simply a life time annuity with a retirement plan label on it; which means your withdrawals should always be equivalent to your current level of life time income available which can only be determined by an actuary.
Please be aware that it does not separate custody of assets from the owner of assets and therefore it should not be considered safe or secure. Oh, and in regards to regulatory reporting rules:
Annually you not only report it to the IRS but to make reporting even more complicated, you send them a copy of your current valuation so that the IRS can decide if your withdrawals have been treated for tax purpose in accordance with life time annuity rules.
If you do not follow the rules than the Malta Scheme becomes a Passive Foreign Investment Company and is taxed annually. In other words it is simple to get your after tax money in to this structure and it is complex to get your money out.
[box type=”alert” size=”large” style=”rounded” border=”full”]Beware: The Malta ”U.S. Pension Scheme” is not liquid and it is not deemed as continuously tax compliant.[/box]