Pension office to slash admin fee
There are only two circumstances in which money can be withdrawn from the pension fund before retirement; for first Hajj or housing down payments.
The board of the Pension Office has decided to reduce the administrative fees charged for running the Maldives Retirement Pension Scheme (MRPS) from next month onwards.
The Pension Board has decided to reduce the administrative fees charged for running the pension scheme under the Pension Act of Maldives.
So far, pre-retirement funds and post-retirement funds charge 0.6% as an administrative fee.
Pre-retirement funds are funds in which the money of members who have not reached pensionable age can be invested. These funds focus on increasing the return on investments and maintaining the value of the currency.
Post-retirement funds are funds in which the money of members who have reached pensionable age can be invested. These funds prefer to hold the value of the currency by investing conservatively.
However, with the new change, the two funds will charge two different amounts of administrative fees. They include:
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Pre-retirement funds charge 0.5% per annum from 1 January 2024
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Post-retirement funds charge 0.3% per annum from 1 January 2024
The Pension Office says it has always paid close attention to minimizing the amount of administrative fees charged. Thus:
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This is the fourth time the amount has been reduced since the Pension Act came into force
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Previous fee reductions were made in 2015, 2017 and 2018
The purpose of charging the administrative fee is to cover the costs of running the pension scheme, the Pension Office said. These include accounting expenses, investment expenses, financial transaction expenses, custodian expenses and audit expenses.
‘Details of the amount of administrative fees charged can be found on members' retirement savings account statements. Other details of statements and account balances can be found on the Koshaaru application and on the website," the pension office said in a statement.
Participation in the Retirement Pension Scheme, which aims to enable people to live independently after retirement, is compulsory by law for Maldivians aged 16 to 65 working in Maldives.
Self-employed workers, fishermen and farmers also have the opportunity to participate in the scheme voluntarily.
Pension Fund:
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Each month, the fund will accrue an employee's pensionable salary, which is 7% of the basic salary; the employer must also deposit the same amount
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The money deposited is invested by the Pension Office in accordance with the Pension Act; the profit from the investment is divided equally among all the participants
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The money in the pension fund will be available to anyone when they reach the age of 65 and retire; in some cases, you can take early retirement
There are only two circumstances in which money can be withdrawn from the pension fund before retirement:
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To pay the down payment for housing
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To perform the first Hajj
In both cases, the money can be used under certain rules and conditions
