Profils de pays

Maurice

Profils de pays

Maurice

Pensions complémentaires (volontaires)

Updated: 30 septembre 2020

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Law(s) on complementary occupational pension plans

The Private Pension Schemes Act ("PPSA" or the "Act") is the main legislation establishing a framework for the regulation and supervision of private pension schemes in Mauritius. Following the enactment of the PPSA, the Financial Services Commission, Mauritius (‘FSC') is the regulator and supervisor of private pension schemes. The Act came into force in November 2012.

The PPSA is supplemented by the following set of FSC Rules:

2019: Private Pension Schemes (Body of Persons) Rules. These Rules allow private pension schemes to be structured as Protected Cell Companies.

2015: Private Pension Schemes (Auditor & Actuary) Rules. These Rules set requirements concerning periodical financial statements to be prepared and audited, as well as the appointments of auditors and actuaries.

2014: Private Pension Schemes (Returns) Rules. These Rules specify the statutory submission requirements of a private pension scheme licensed under the Act.

2014: Private Pension Schemes (Administration) Rules. These Rules provide for the duties and functions of the pension scheme administrator licensed under the Financial Services Act.

2013: Private Pension Schemes (Investment) Rules. These Rules apply to the investment of assets of private pension schemes licensed under the Act.

2013: Private Pension Schemes (Technical Funding Requirement) Rules. These Rules specify the technical funding requirements for private pension schemes licensed under the Act.

2012: Private Pension Scheme (Licensing and Authorisation) Rules. These Rules provide for the licensing and authorisation of private pension schemes under the Act, including the conditions and requirements of approval for setting up private pension schemes.

2012: Private Pension Schemes (Governance) Rules. These Rules provide for the governance of private pension schemes licensed under the Act.
2012: Private Pension Schemes (Disclosure) Rules. These Rules provide for the disclosure and communication of information and documents to beneficiaries of private pension schemes licensed under the Act.

The Income Tax Act specifies conditions of tax treatment of pension benefits of private pension schemes licensed under the PPSA.

Previously, occupational pension schemes established under the repealed Employees Superannuation Fund Act 1954 and the Income Tax Regulations 1996 were registered with the Mauritius Revenue Authority (the tax revenue authority in Mauritius). These schemes are now deemed to be licensed under section 58 of the PPSA and fall under the purview of the FSC.

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Plan sponsors

National Pensions Fund - recently abolished

The National Pensions Fund (NPF), introduced in 1978, was a mandatory defined benefit scheme covering employees of the private sector. However, it did not cover employees with very low wages and some sugar industry employees. The last month for which contribution to the NPF is applicable is August 2020.

Contribution Sociale Généralisée- recently introduced
Pursuant to the Budget Speech 2020/21 announced in June 2020, a new regime called the Contribution Sociale Généralisée (‘CSG') has been introduced and the National Pension Fund (‘NPF') has been abolished in August 2020. NPF was a mandatory pension scheme covering employees of the private sector. Under the NPF, an employee contributed 3% of his basic salary and his employer, 6%. The rate of contribution was applied on a ceiling of MUR 18,740, irrespective of the basic salary.

Contributions to the CSG has started since September 2020. Under the CSG, employers are required to deduct, where applicable, the employee's contribution from his wage or salary and pay that contribution together with the employer's contribution to the Mauritius Revenue Authority.

The table below sets the prescribed CSG rates:

 Employee earning remuneration < MUR 50,000 Private Sector Public Sector
 Employee Rate 1.5% -
 Employer Rate 3% 4.5%

 

 Employee earning remuneration > MUR 50,000 Private Sector Public Sector
 Employee Rate 3% -
 Employer Rate 6% 9%

Self-employed individuals are required to pay a compulsory nominal amount of MUR 150 as CSG contribution.

National Savings Fund

The National Savings Fund (NSF) is a defined contribution scheme, which requires employees of both the private sector and the public sector to participate. Only Mauritian non-citizens are not required to participate in the NSF. Low income earners are not covered. The table below sets the contribution rates payable by the employer and employee towards the NSF:

 Contribution Rate 
 Employee Rate 1%
 Employer Rate 2.5%


Voluntary occupational pension schemes

Private pension schemes, whether or not sponsored by an employer or several employers can be set up, to provide additional retirement income to employees. These schemes are voluntary in nature.

These plan sponsors operate in the private sector in various industry sectors (e.g. education, tourism, construction, healthcare, financial Services, etc.).

 

Types of plans

Section 9 of the PPSA provides that a person who intends to operate a pension scheme in Mauritius shall make an application to the FSC, in such form and manner as may be specified in the FSC Rules, for the pension scheme to be licensed.

An application for a private pension scheme licence is supported by the following documents:

- A duly completed and signed application form;
- A certified copy of the resolution of the governing body authorising two members of the governing body to sign the application form;
- A copy of the constitutive documents of the private pension scheme;
- Duly completed and signed personal questionnaires for each member of the governing body;
- A copy of the written investment policy of the applicant;
- All contractual agreements between the governing body and third parties, where applicable;
- Any leaflets or other informative documents including advertising material meant for members or prospective members; and
- Any other information or document required by the FSC upon application.

Section 8 of the PPSA provides that no person shall operate a private pension scheme unless the scheme is -
(a) a trust, a foundation or such body of persons as may be specified in the FSC rules; and
(b) licensed or authorised, as the case may be, under this Act.

Private Pension schemes can be licensed or authorised as:
(a) Domestic private pension schemes (to be licensed and structured as trust or foundation).
(b) External private pension schemes (to be licensed and structured as trust, foundation or protected cell company).
(c) Foreign pension schemes (to be authorised).

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A private pension scheme must at all times be governed by a governing body whose members are suitably qualified to be appointed or elected. The governing body of a private pension scheme shall be ultimately responsible for:
(a) the administration of the scheme;
(b) the management or investment of the assets of the scheme;
(c) ensuring adherence to the terms of the constitutive documents;
(d) the protection of the best interests of beneficiaries; and
(e) ensuring that the private pension scheme fulfils its overriding objective to provide for pension benefits.

Licensed private pension schemes have a governing body that should constitute of at least 3 persons. Where a private pension scheme is sponsored by an employer, at least one-third of the members of the governing body shall be elected or appointed by the members of the scheme.

The private pension scheme is a separate legal entity from the sponsoring employer.

Prior to the coming into force of the PPSA, private pension schemes did not have a legal structure and were mainly managed as insurance contracts by insurance companies. Under the new legislation which became operational in November 2012, these insured pension schemes, which were contractual in nature, are required to be restructured as either trusts, foundations or such body of persons as may be specified in FSC rules, in order to comply with the provisions of the PPSA.

Pension scheme administrators and long term insurers are involved in the collection of contributions and payment of benefits pursuant to the provisions of the constitutive documents of the private pension schemes.

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There is no specific categorisation under the Private Pension Schemes Act but in general the Act applies to pension schemes sponsored by private sector employees.

Non-occupational pension schemes can be set up for individuals wishing to participate in a private pension scheme. The PPSA does not differentiate between occupational and non-occupational pension schemes.

The PPSA requires that there is no form of discrimination when schemes admit members. The term "discrimination" covers discrimination on basis of race, colour, creed, caste, sex, HIV status, place of origin, national extraction or social origin, sexual orientation and political opinion.

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Sources of funds

Employee contributions

Employees are allowed to make contributions in accordance with the rules of the private pension schemes. There is no legal minimum / maximum rates of contribution or earning limits. The contribution rates are defined in the rules of private pension schemes.

Employer contributions

Employers contribute to the private pension schemes. There is no legal minimum / maximum rates of contribution or earning limits. The contribution rates are defined in the rules of private pension schemes.

Defined Benefit (DB) pension schemes: Contribution rates for DB pension schemes depend on the provisions of the rules of the scheme and are also based on the membership profile of the pension scheme, funding status / valuation status as determined by the scheme actuary and employer covenants.

Rule 4 of the Private Pension Schemes (Technical Funding Requirement) Rules 2013 provides for the technical funding requirement of a DB pension scheme. A DB scheme shall meet the technical funding requirement if:
(a) its funding ratio is at least 100%;
(b) the rates of contributions to the scheme are such that funding ratio of 100% can be expected to be met for the period for which the schedule of contributions is in force; and
(c) it meets all the requirements provided in any FSC Rules issued under the Act.

Other sources of funds

No other sources of funds.

Methods of financing

Employer and employee shares of contributions based on salary of the employee and any additional voluntary contribution from the employee.
There are no legal requirements on funding/ type of financial vehicles to be used to cover liabilities of a pension scheme.

Asset management

The Private Pension Schemes (Investment) Rules provide that investment of assets of a private pension scheme should be made by investment managers and/ or long term insurers which are licensed by the FSC. Private pension schemes may also have their governing bodies authorised by the FSC to provide in-house management of assets.

There is the requirement for the private pension scheme to have a written investment policy.

Prudent person standard applies with regard to investment limits on, inter alia, foreign investments, investments directly or indirectly related to the sponsoring employers, investments in equities, fixed income instruments, etc. According to Rule 11 of the Private Pension Schemes (Investment) Rules 2013, the main investment limits are:

(1) private pension scheme (with the exception of external pension scheme) shall not invest more than 70 per cent of the total value of its assets outside Mauritius;

(2) the aggregate value of investments of a private pension scheme in any single entity or group of related entities or in any type of commodity whose securities are listed-
a) on securities exchanges licensed by the FSC, shall not exceed 20 per cent of the total value of assets of a private pension scheme;
b) on securities exchanges which are members of the World Federation of Exchanges, shall not exceed 10 per cent of the total value of assets of a private pension scheme;

(3) private pension schemes shall not invest more than 20 per cent of its total value of assets in fixed income securities issued by any single foreign government;

(4) the aggregate value of investments of a private pension scheme in any single entity or a group of related entities or in any type of commodity whose securities are not listed on a securities exchange licensed by the FSC or a securities which is a member of the World Federation of Exchanges shall not exceed 5 per cent of the total value of assets of a private pension scheme;

(5) private pension schemes shall not invest more than 10 per cent of the total value of its assets in any specific immoveable property;

(6) the aggregate value of investment of a private pension scheme in its sponsoring employer and in one or more of the sponsoring employer's related entities shall not exceed-

(a) 15 percent of the total value of the assets of the scheme where the sponsoring employer has its securities listed on a securities exchange licensed by the FSC ;
(b) 5 percent of the total value of the assets of the scheme where the sponsoring employer has its securities not listed on a securities exchange which is a member of the World Federation of Exchanges.

There is no legal minimum/ maximum level of management fees / administration fees.

Pursuant to Rule 4(3) of the Private Pension Schemes (Investment) Rules, asset allocations for a private pension scheme is required to be determined by an actuary. In practice, the decision on asset allocation is made in consultation with the governing bodies and the pension investment managers of the schemes.

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Acquisition and maintenance of rights

Waiting period

There is no prescribed legal provision under the law providing for the period of employment to qualify for full membership in a private pension scheme. However, such period is usually provided for in the constitutive documents of the private pension scheme, at the discretion of the sponsoring employer of the scheme.

The law refers to a "worker" employed by an employer and also provides for minimum age for employment (as per the Workers' Rights Act 2019). The law expressly defines "young person" as a person other than a child, who is under the age of 18.

The constitutive documents of the private pension schemes provide for a definition of "eligible employee", usually being a permanent employee of an employer, who has attained the age of 18.

Vesting rules

Typical vesting provisions under the Private Pension Schemes (Licensing & Authorisation) Rules include:

1. where a member leaves the employment of the sponsoring employer and the value of his accrued benefits from previous employment has been transferred to the scheme, the current total value of his accrued benefits shall be retained in the scheme until payment of pension benefits at the appropriate retirement age or shall be transferred to any other private pension scheme or an individual pension scheme or plan; and

2. where a member leaves the employment of the sponsoring employer, the current total value of his accrued benefits shall be retained in the scheme until payment of pension benefits at the appropriate retirement age or shall be transferred to any other private pension scheme or an individual pension scheme or plan.

The payment of an interest depends on the constitutive documents of the private pension scheme with respect to contributions. Some pension schemes can define "accumulated contribution", in respect of a member, as the total of the contributions paid to the pension scheme less expenses plus interest credited.

Preservation, portability, transferability

The Private Pension Schemes (Licensing and Authorisation) Rules 2012 provides that payment of pension benefits shall be effected only after attaining the appropriate retirement age.
"Appropriate retirement age" is defined in the Rules as follows:
(i) in case a member retires on or after the age of 50, the actual age of retirement;
(ii) in case of early retirement on grounds of ill health, the actual age of retirement; or
(iii) in case of retirement before the age of 50, the age of 50 or such other age the FSC considers reasonable having regard to the nature of employment or occupation of members of the private pension scheme.

The above therefore captures provisions regarding members leaving a pension scheme before retirement age. In current market practice, normal retirement age is either 60 years or 65 years- depending on the definition provided in the Rules of the scheme. However, a member is allowed to retire as from the age of 50 with the consent of the employer, or can retire even earlier on grounds of ill health or with the approval of the FSC on the ground of the nature of employment or occupation of members of the private pension scheme.

In current market practice, when a member leaves a private pension scheme, his or her accrued pension benefits, in the case of a defined contribution plan, will still accrue interest.

Calculation of accrued benefits is not defined in all constitutive documents of the private pension schemes as the actuarial value of the accrued retirement benefits is determined by the scheme actuary. Some pension schemes indicate in their constitutive documents that the actuarial value of the accrued retirement benefits shall be calculated in accordance with instructions provided by the scheme actuary.

Accrued benefits can be transferred but the determination of transfer value is not provided for in the laws but is usually certified by the scheme actuary.

Retirement benefits

Benefit qualifying conditions

The PPSA provides that benefits from occupational pension schemes can be paid at an appropriate retirement age.

With regard to normal retirement age, the constitutive documents of private pension schemes normally provide for same age as in social security programs, namely the last day of the month during which the member reaches age 60 or 65.

The Private Pension Schemes (Licensing and Authorisation) Rules require that the constitutive documents of private pension schemes provide for clear conditions for early retirement on grounds of ill-health.

There are legal provisions allowing for early retirement.

Benefits will be paid earlier in cases of early ill health retirement.

Benefit structure / formula

Pension schemes can either be a defined benefit scheme or a defined contribution scheme as provided for under the PPSA (see section 2.2).

There are no legal requirements governing accrual rates.

Pension schemes provide for earnings related benefits and also benefits related to disability and death (lump sum).

Benefits can be taken as pensions only or part lump sum and part pensions .

The Private Pension Schemes (Licensing and Authorisation) Rules provide for pension benefits which may be exchanged as lump sum not exceeding one-fourth of the pension payable at retirement.

Retirement benefits from private pension schemes act as a top up over and above the State pensions and the mandatory pillars.

Pensions can be paid out of the fund or accrued benefits can be used to purchase an annuity to provide for monthly pensions from an insurance company.

The legal provisions do not provide for an annuity formula. The annuity formula to be used is determined by the Insurance Company (by the insurer's actuary).

The law does not specify on unisex actuarial tables and age restriction on annuity.

Benefit adjustment

There are no maximum / minimum legal requirements for indexation of pensions.

Annual increases are provided for in the constitutive documents of the private pension schemes but are not mandatory and can be discretionary.

Increases in pension payments will depend on how it is provided for in the constitutive documents of the pension scheme. It is usually decided on a discretionary basis.

Survivors

Most pension schemes usually provide that when a Member dies before retirement, a benefit is paid to the person or persons legally entitled thereto based on the Member's Final Pensionable Emoluments.

The law does not provide any specific conditions on age or other conditions (of both the scheme members and the survivors) to receive survivor benefits. However, as per industry practice, most pension schemes usually provide the following conditions:

(1) the pension payable on the death of a Member in service is:
(a) in the case of the Spouse, one-third
(b) in the case of the Children, jointly;
(2) where a pension is also provided for the Spouse, one sixth;
(3) in any other case, one-third of a pension calculated as one-sixtieth of the Member's Final Pensionable Emoluments for each full year of service that would have been completed if he had survived up to Scheme Retirement Date, with a maximum of forty years.

Provided always that the children's pension shall continue to be paid until the youngest child attains age 18.

Disability

Pension benefits, as defined under the PPSA, include disability benefits. Usually most of the pension schemes provide disability benefits.
Any special conditions (age or others) are usually provided for in the constitutive documents of pension schemes.

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Protection of Assets

The legal requirements which prescribe the separation of the pension plan assets from those of sponsoring employers are provided for in section 24(3) of the PPSA.

Financial and Technical Requirements / Reporting

The legal requirements which dictate actuarial funding standards and which require a plan to cause an actuary to periodically examine the financial soundness of the private pension scheme are provided for in the Private Pension Schemes (Technical Funding Requirement) Rules.

The legal requirements concerning periodical financial statements to be prepared and audited are provided for in the Private Pension Schemes (Returns) Rules and the Private Pension Schemes (Auditor & Actuary) Rules.

The legal requirements concerning reports (actuarial certificates, audited accounts, investment reports, etc.) are provided for in the Private Pension Schemes (Technical Funding Requirement) and the Private Pension Schemes (Auditor and Actuary) Rules.

There are special requirements provided for in the Private Pension Schemes (Technical Funding Requirement) Rules for the supervisory authority (the FSC) to take actions in the case of underfunding (e.g. requirement to submit contingency plan).

Whistleblowing

There are special legal requirements for service providers or professional advisers (auditor, actuary, custodian, etc.) of a pension scheme to inform the supervisory authority (the FSC) if they believe that the private pension scheme is not being managed in compliance with the legal requirements or that the sponsoring employer of the scheme is not meeting its obligations. These are provided for under section 40 of the PPSA.

Standards for service providers

Service Providers are required to be licensed by the FSC as per the requirements of both the PPSA and the Financial Services Act.

The legal requirements for actuaries and auditors are stated in the Private Pension Schemes (Auditor and Actuary) Rules.

Actuaries and auditors have to be independent of the private pension scheme, its sponsoring employer or entities related to its sponsoring employer, and members of the governing body, as provided for in the Private Pension Schemes (Auditor and Actuary) Rules.

Fees

There is no legal provision with respect to fees charged by service providers.

Winding up / Merger and acquisition

There are special legal requirements in the PPSA for the winding-up procedure when a private pension scheme is wound up.

There are also special requirements for protecting rights in the case of amalgamations of private pension schemes of different sponsoring employers. This is provided for in the PPSA.

Bankruptcy: Insolvency Insurance / Compensation Fund

There are no legal requirements to buy insurance against low performance or insolvency of private pension schemes.

There are no legal requirements for a compensation fund.

Disclosure of information / Individual action

There are legal requirements for pension scheme administrators to periodically disclose information (e.g. benefit statements, financial statement, etc.) to members and beneficiaries of private pension schemes. This is provided for in the Private Pension Schemes (Disclosure) Rules.

The administrator of a private pension scheme shall:

(1) within two months of the end of the financial year of the scheme, provide in writing to all members of the scheme, a statement that shall include the information specified in the Private Pension Schemes (Disclosure) Rules;

(2) where a pension benefit under the scheme has become payable to a beneficiary, provide any relevant information to that beneficiary on the date on which the pension benefit becomes payable;

(3) where a pension benefit under the scheme becomes payable as a result of the death of a beneficiary, provide any relevant information to the person entitled to the pension benefit on the date on which the pension benefit becomes payable.

The Ombudsperson for Financial Services Act 2018 provides for the establishment of the Office of the Ombudsperson for Financial Services (the ‘Ombudsperson'). With a view to giving better protection to consumers of financial services, the Ombudsperson is responsible to receive and deal with complaints from consumers of financial services against financial institutions and may make an award for compensation, where appropriate, and give such directives as he may determine to financial institutions. It is incumbent on the Ombudsperson to inform and educate the general public on investments in financial services offered by financial institutions.

The Ombudsperson has, on 7 March 2019, published the procedures which should be followed by an aggrieved person for the making of a complaint to the Ombudsperson.

The FSC also intervenes, should the Ombudsperson require any additional information on the licensees.

The legislation in force allows for members of pension schemes to bring civil and/or criminal action against the pension scheme whereby governing body members or service providers have failed in their duties towards the scheme. This is provided under section 54 of the PPSA. The PPSA also outlines other offences which may be applicable under specific circumstances.

Other measures

Members have a right to seek redress through a Court of law.

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Taxation of employee contributions

Employee contribution is taxable.

Taxation of employer contributions

Employer contribution is tax exempt.

Taxation of investment income

Investment Income is tax exempt.

Taxation of benefits

Benefits are taxable.

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The FSC is the regulator and supervisor of private pension schemes in Mauritius.

The powers of the FSC to supervise and monitor the compliance of private pension schemes and service providers to the schemes under the provisions of the PPSA and the Financial Services Act.

The supervisory authority can impose sanctions and disqualify service providers of schemes if they have failed in their duties and responsibilities towards the schemes. This is provided for in the PPSA and the Financial Services Act.

There is no advisory committee to the supervisory authority.

The supervision of the financial sector is integrated.

The supervisory authority is financially independent from the state.

Financial Services Commission
FSC House, 54 Cybercity,
Ebene 72201,
Republic of Mauritius

[email protected]
+230 4037000
www.fscmauritius.org

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