Gov’t to Cease Monthly Allowances for New Retirees from January

The government will discontinue monthly allowances for newly retired employees starting January 2025, as confirmed in a letter signed by National Pay Commission President and Minister of Finance Moosa Zameer.

Under the revised policy, retirees will continue to receive a lump sum payment upon retirement, but those retiring from January onwards will no longer qualify for monthly allowances. However, employees who retire by the end of this year will remain eligible for these benefits under the current regulations.

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In preparation for the changes, retirement pension agencies have been instructed to amend their rules by 15 December, submit them to the Ministry of Finance for approval, and publish the updated regulations in the government gazette.

There are 13 state agencies currently managing separate pension schemes, and their associated costs have been rising annually. This year, expenditure on these schemes totalled MVR 339 million, with projections indicating an increase to MVR 386 million in 2024.

The state introduced a national retirement pension scheme in 2009, intended to provide coverage for all Maldivians through a system of employer and employee contributions. However, the older state-funded schemes, which were supposed to be phased out, remain active, further straining government resources.

Next year’s budget accounts for an increase in the number of employees eligible for retirement benefits, alongside a rise in spending for individuals aged over 65. To manage these growing costs, the budget proposes eliminating the retirement allowance and revising old-age pension regulations to prioritise support for the most vulnerable citizens.