The current pension system in the Maldives heavily relies on the state budget. The amount that needs to be spent on the pension system is increasing significantly year by year. Although various governments have attempted to address this issue on different occasions, an adequate solution has not been found to date. However, the current President, Dr. Mohamed Muizzu, has decided to take special measures to resolve many of the inequities in the pension system.
In a post shared on social media, President Muizzu stated that work is underway to amend laws and regulations to standardize pension benefits for those retiring from government jobs. He said that regulations would be amended so that when a person receiving pension benefits from retiring from a government job returns to another government position, those benefits would be suspended for the duration of their new employment.
The government had previously decided to make significant changes to the state pension system. Some of these changes have been detailed to journalists by the Ministry of Finance earlier. With the 2008 Green Constitution, a Maldives Pension Act came into effect, introducing a multipillar pension system. This system mainly comprises two pension schemes: the Maldives Retirement Pension Scheme and the Old-Age Basic Pension Scheme.
The Old-Age Basic Pension Scheme is a 5,000 rufiyaa benefit given by the government when a person turns 65. While the government has decided to make changes to this benefit system, these changes will not cut off benefits to anyone who is eligible. Currently, the benefit is given regardless of how much money a person has in their possession, even if they are wealthy. The government has noted that this is not the most robust approach. In addition to the Old-Age Scheme introduced through the multipillar pension system in 2009, the Maldives Retirement Pension Scheme was established. This scheme provides both a lump sum payment and a monthly pension for life when employees retire from Maldivian state institutions.
In addition to this system, some state agencies began offering additional pensions through regulations and principles they formulated independently. This led to the creation of a double pension scheme. As a result, equality was lost in the pensions received by those who worked for and retired from the state. It paved the way for some parties to receive much more money outside the general principle. Furthermore, currently, when a person receiving pension benefits from retiring from a government job returns to another government position, they continue to receive the pension even during their new employment period. As this is not considered the best approach, the President has decided to amend it so that the benefit is suspended when returning to a government job. With these changes the government has decided to implement, the state treasury will be relieved, and a robust pension system will be established.
