Pension Office Reveals Monthly Expenditure on Double Pensions
The Pension Office has disclosed that MVR 33 million is spent each month on supplementary pensions, also known as double pensions, in addition to the basic pension.
Speaking at the Independent Institutions Committee of the Parliament yesterday, the CEO of the office, Sujatha Haleem, expressed concern over the substantial expenditure on double pensions while the basic pension itself costs MVR 110 million per month.
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The pensions currently provided include the Maldives Retirement Pension Scheme and the Basic Old Age Pension Scheme. Approximately 23,000 individuals receive a pension upon reaching the age of 65, with many beneficiaries receiving double pensions.
Sujatha elaborated on the MVR 33 million cost of double pensions, explaining that different institutions offer varying retirement packages, with 4,800 recipients collectively receiving over MVR 28 million. Additionally, a monthly allowance is given for long-standing service, amounting to over MVR 4 million distributed among 2,000 recipients.
Sujatha noted that the pension system was initially designed to honour long-serving individuals by depositing 14% of their service period’s value into their accounts. She argued that additional pensions for service recognition are unnecessary.
Over the past 15 years, various efforts have been made with different governments to reduce additional pension expenditures. Sujatha has examined practices in other countries, prepared reports, and shared proposed amendments with the finance ministry, though she did not specify the exact timeline of these activities.
The Maldives has the highest relative spending on the elderly in South Asia, with its pension levels considered high by international standards.
A World Bank report highlighted that the old age pension in the country is high, at least MVR 5,000 per month, and it may become unsustainable as the working population decreases and the elderly population increases.
Therefore, the rules for pension payments should be revised to reduce the overall system cost. Retirement incentives should be introduced to encourage personal savings.
