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Complementary pensions (Mandatory)

Updated: 22 December 2021
2009: Maldives Pension Act (8/2009) defines the procedure to establish a mandatory defined contribution scheme, and government funded old age basic pension scheme.
The Act also defines the transition arrangement for citizens who were receiving defined benefit pension payouts from the government budget to the new schemes defined in the Act. As of 22nd December 2021, there has been five amendments brought to the Maldives Pension Act (8/2009). The latest amendment was brought on 5th August 2019.

2006: The Capital Market Development Authority was established under the Maldives Securities Act (2/2006) to develop and regulate capital markets in the Maldives. Under Section 5 of the Maldives Pension Act it was mandated for the Capital Market Development Authority to establish a Pension Supervision Department to regulate and supervise the Maldives Retirement Pension Scheme which was established under the Maldives Pension Act.

The Maldives Pension Act (8/2009) requires establishing a separate office to be known as Maldives Pension Administration Office (MPAO) to administer "Maldives Retirement Pension Scheme" (MRPS) which is a mandatory DC scheme for all employers and employees, and to make disbursements of government funded basic pension scheme.
The Maldives Pension Administration Office is a state institution. It is administered by a Board of Directors comprising of the following 8 members.
  • Chairman of the Board
  • A senior employee of Securities Market Regulator (a non-voting member
  • A senior Civil Servant of the Ministry of Finance and Treasury
  • A senior Civil Servant from the Ministry responsible for social security; and
  • Four (4) members from private sector not employed by the State or Government

Powers of the Board include, but are not limited to the following:
  • Tendering to select External Asset Managers, Custodians, Open-ended Vehicle;
  • To contract with Asset Managers, Custodians, Open-ended Vehicle, Accountants, Auditors, and other service providers, and administer such contracts;
  • Demanding and receiving information from Asset Managers, Custodians, Open-ended Vehicle and other service providers with respect to all transactions related to the Scheme;
  • Charging a reasonable fee from participants of the scheme, on the advice of the Regulative Authority, in order to recover the cost of administering the Retirement Pension Scheme;
  • Purchase, sale and lease of moveable and immovable assets required for the operation of the Pension Office;
  • Employ and dismiss personnel required for the operation of the Pension Office including the appointment of a Chief Executive Officer;
  • Preparing the budget of the Pension Office;
  • Enter into contracts and agreements with government institutions in order to administer programs such as social protection program. Determine the procedure for the operation of programs conducted under such agreements; and
  • Conduct board meetings of the Pension Office, and formulate regulations for the operation of the Pension Office. Administer the Pension Office in accordance with this Act and regulations.


Covered population

As a mandatory scheme, it is obligatory for all public and private sector employees to participate in the scheme.
Rules made under the Act provide the procedure for self-employed workers to join the scheme. Foreign employees and self-employed persons can participate voluntarily.

Enforcement of affiliation

Employers who fail to register their employees are subjected to a fine of MVR500 (USD32.43) per month. For failure to submit the Statement of Pension Contribution (SPC), employers are subjected to a fine of MVR100 (USD 6.49) per month. Furthermore, a fine of 0.50% per month is applicable for late payment. For all other violations, a fine of MVR500 (USD32.43) to MVR50,000 (USD3,242.54) is imposed depending on the consequences of the breach.

Sources of funds

Each employee shall pay a minimum 7% of the pensionable wage, and the employer shall also pay a minimum of 7% of the pensionable wage of the employees.
The maximum contribution that can be paid voluntarily to the scheme for a year in addition to the mandatory contribution specified in the Pension Act is no more than 14% of the yearly salary of the most highly paid State Employee.
A government subsidy of MVR 2000.00 is paid to each of the first five thousand self-employed workers who join the scheme each year.
Self-employed workers who earn less than MVR 5000.00 receive a matching contribution of up to 25% of yearly contribution which is limited to 25% of the average pension contribution (7% of pensionable wage) of government employees as a government subsidy.

Member contributions

Members are expected to contribute 7% of basic salary.

Employer contributions

Employers are expected to contribute 7% of basic salary of each employee.

Other sources of funds

Any voluntary contribution subject to a statutory limit.

Methods of Financing

Employers are obliged to calculate employees' and employer's monthly pension contributions and deposit the amount to the Contributions Collection Account of Maldives Pension Administration Office before 15th of the following month.

Asset Management

Asset management can be done in-house and by hiring asset managers who are licensed by the Securities Market Regulator.
Investment in investment products of a custodian bank is not allowed to the pension fund.
Investment limits are defined by the Investment Committee of the fund.
There is no legal minimum/maximum fee.
The Act defines the types of assets the pension fund can invest and forbid to invest. Portfolio composition is determined by the Investment Committee of the Board of Directors.

Preservation, portability, transferability

Waiting period
As it is a mandatory scheme there is no waiting period. Any employee of the age between 16 and 65 should contribute to the pension scheme.

Vesting rules
There are no vesting provisions and members are only allowed to get benefits from the fund after retirement.

Preservation, portability, transferability
As the Maldives Retirement Pension Scheme is a mandatory scheme, members will be contributing the same account while moving from one job to another.

Retirement Benefits

Benefit qualifying conditions

According to the Act, pensionable age is 65.

Withdrawal of funds before retirement

A person can opt for early retirement at the age of 55 if he has accumulated an amount which can provide a monthly benefit which has to be double the amount of the basic pension untill the life expectancy determined by the Maldives Pension Administration Office.

Benefit structure / formula

Maldives Retirement Pension Scheme is a define contribution scheme.Benefit formula is:
  • Pension Benefit = (total amount in the retirement savings account) / (Life Expectancy )

Maldives Retirement Pension Scheme does not provide lump sum amount as benefit.

Members receiving monthly benefit from Maldives Retirement Pension Scheme which is less than the double of the Basic Pension will also receive old age basic pension after deducting a value of 50% of benefit received from of Maldives Retirement Pension Scheme (MRPS).
Though it is allowable to provide annuity to the retirees of the scheme, the MRPS has not started it yet.

Benefit adjustment

If the living cost has increased more than 5% within a year, the Maldives Pension Administration Office has the power to adjust the value of basic pension as per the increase.


Survivors benefit is not included in the scheme. However if the deceased has any amount left in the Retirement Pension Scheme at the time of death, the amount will be given or transferred to legal beneficiaries.

Benefit qualifying conditions

Benefit structure

Benefit adjustment


The Act gives the power to the Maldives Pension Administration Office to introduce a disability insurance scheme. There have been discussions on reviewing the present concept and the work is in progress.

Benefit qualifying conditions

Benefit structure

Benefit adjustment

Protection of Assets

The Act requires the Maldives Pension Administration Office to separate the assets of the institution and Maldives Retirement Pension Scheme.

Financial and Technical Requirements / Reporting

There is no requirement for actuarial funding standards.
The Act mandates the MPAO to submit annual audited financial statements of MPAO and MRPS, and Quarterly Investment Activity Report to the Capital Market Development Authority.


Standards for service providers

Act has stated that the service providers should be licensed by Securities Market Regulator.


There are no legal limits on fees; however the MPAO should consult with the Securities Market Regulator when deciding on fees. As of 22nd December 2021, the fee charged is 0.60% p.a. (since January 2018).

Winding up / Merger and acquisition

Bankruptcy: Insolvency Insurance / Compensation Fund

Disclosure of information / Individual action

Other measures

Maldives Pension Act states that the amount contributed to the Scheme shall be exempt from income tax levied on an employee or employer under any Act.

Taxation of member contributions

Tax exempt

Taxation of employer contributions

Tax exempt

Taxation of investment income

No legal rules

Taxation of benefits

No legal rules
Under the Act, the Capital Market Development Authority is given the power to supervise the Maldives Retirement Pension Scheme. Accordingly the Authority conducts continuous off-site supervision and annual on-site inspection. The Authority has adopted Risk Based Supervision since 2012.

Capital Market Development Authority,
3rd Floor, H.Orchid ,
Ameer Ahmed Magu,
Male' 20095
Email: [email protected]
Phone: +960 301 4113
Fax: +960 333 6624


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