Pension Payments Expected to Reach Unsustainable Levels by 2030, Says Pension Office
Public Accounts Committee, 18th Sitting | Photo: People’s Majlis
CEO of the Maldives Pension Administration Office, Sujatha Haleem, has stated that the cost of pension payments in the Maldives is currently around MVR 100 million per month, a figure that is projected to rise to unsustainable levels by 2030.
This increase is primarily due to the growing ageing population, with the number of people over the age of 65 expected to rise by seven percent by 2030, significantly escalating pension expenses and placing a heavier financial burden on the state.
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The Public Accounts Committee of Parliament, which is investigating the issue of double pensions, met with officials from the Pension Office and the Civil Service Commission (CSC) on Monday. During the session, Sujatha Haleem highlighted the impact of multiple pension schemes introduced outside the main pension system, which has led to a highly discriminatory system. However, she expressed that abruptly halting benefits for certain individuals would not be the best course of action. She emphasised the need for a balanced approach, proposing that a clear plan be devised, including setting a specific date to phase out these benefits.
Mohamed Nasih, President of the Civil Service Commission, also addressed the committee, explaining that the civil service is the largest state employer, with approximately 35,000 employees. Since 2008, the CSC has facilitated mandatory retirement allowances for 5,336 civil servants, including 1,612 individuals retired at the age of 55 and 3,626 who retired at 65. Nasih clarified that retirees who reach 65 are eligible to receive both a pension under the contributory scheme and a retirement allowance from the civil service. He noted that this dual benefit, which some perceive as double pension, requires a legal solution.
Nasih further stated that while retirees may take up work in the private sector, it does not make sense for individuals receiving state pension benefits to continue working in state jobs.
The issue of double pensions was initially raised last week by Deputy Speaker Ahmed Nazim, who pointed out that the state has spent over MVR 2.96 billion on pensions over the last 13 years. Nazim proposed a parliamentary inquiry to address the matter.
