Pensions Act amendment proposed to allow withdrawals for serious illness

A bill has been submitted to amend the Pensions Act to allow withdrawals from pension funds in cases of terminal or serious life-threatening illness.

The bill was submitted by Hassan Mufeed Abdul Ghadir on behalf of the government.

President Mohamed Muizzu stated on 8 last month that the law would be amended to permit pension withdrawals under specific circumstances.

Under the current law, pension funds may be accessed for Hajj expenses and housing purposes. The proposed amendment expands the permitted uses to include medical treatment for individuals diagnosed with terminal or serious life-threatening illnesses.

The bill allows a pension scheme member to withdraw funds from their retirement savings account in the event of a terminal illness. Terminal illness is defined in the amendment as a medical condition where a specialist determines that the individual is unlikely to survive beyond 12 months despite appropriate medical care.

In such cases, either the full balance of the pension account or the amount requested by the member may be released.

The bill also proposes additional amendments to pension eligibility. Under the proposed changes, individuals whose pension savings and other state income exceed the basic pension amount would not qualify for an old-age pension.

In addition, a person receiving a pension would no longer be eligible to receive pension payments if elected to an office under the Constitution or law, or if appointed to a position in a state or government-owned company.