Pension Contribution Duties: Employers’ Vital Role in Securing Employees’ Future

In the present flourishing work environment, moving beyond mere adherence to the Pension Act, forward-thinking employers grasp the significant potential to safeguard their employees’ financial well-being during retirement. As mandated by the Maldives’ Pension Act, employers play a crucial part in enrolling their employees in the Maldives Retirement Pension Scheme (MRPS) and regularly contributing to it.

Pension contributions

Flexibility in Contributions

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Under the Pension Act, employers are required to contribute a minimum of 7% of the employee’s pensionable wage to the MRPS. However, employers have the autonomy to contribute more, even up to the full 14%, if they wish to do so. This flexibility enables employers to demonstrate their commitment to their employees’ long-term financial security, showcasing a culture of care and support within the organization.

Single Retirement Savings Account (RSA)

Throughout an employee’s career, they will maintain a single RSA within the MRPS, regardless of how many jobs they change. This ensures consistency and simplicity for both employees and employers, making it easier to keep track of pension contributions and retirement planning.

Mandatory Participation Age

All employees aged between 16 and 65 years are required to participate in the MRPS. By ensuring participation from the outset of employment, employers can ensure that their employees are building a substantial pension fund over their working years, setting the stage for a comfortable retirement.

Responsibilities of Employers

Enrolment in MRPS

Employers hold the responsibility of enrolling their eligible employees into the MRPS through the Koshaaru Portal. This step is essential to ensure that all eligible employees have access to the benefits of the pension scheme.

Timely Contributions

To maintain compliance with the Pension Act, employers must make regular monthly contributions to the MRPS on behalf of their employees. Contributions should be submitted by the stipulated deadline, which is the 15th of the following month. Timely contributions demonstrate a commitment to fulfilling obligations and securing employees’ financial futures.

Penalty for Late Payments

Late payment of pension contributions will incur fines, and it is the employer’s responsibility to bear these penalties. The fines are then deposited into the respective employee’s RSA, reinforcing the employer’s role in safeguarding their employees’ retirement funds. It’s important for employers to prioritize punctual contributions to avoid financial strain on both the company and its employees.

By proactively contributing to their employee’s retirement funds and ensuring compliance with the regulations, employers not only avoid potential penalties but also foster a culture of financial security and well-being within their organization. 

This collaborative effort between employers and the government promises a more secure and stable retirement for all employees, strengthening the overall welfare of the country’s labour force.