Double pension costs MVR 33m per month: Pension Office
Sujatha explained in great detail how the double pension costs MVR 33 million.
By
Aishath Maha
MVR 33 million is spent on other pensions (double pensions) outside the basic pension every month, according to the Office of the Pension Administration.
Speaking at the Independent Institutions Committee of the Parliament, the CEO of the office, Sujatha Haleem, said it was worrying that so much was being spent on double pensions while the basic pension cost MVR 110 million per month.
The pensions now include:
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Maldives Retirement Pension Scheme
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Basic Old Age Pension Scheme
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23,000 people receive a pension at the age of 65; many of them receive double pensions
Sujatha explained in great detail how the double pension costs MVR 33 million. She said:
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Different institutions give different amount of retirement package; 4,800 people are paid a total of more than MVR 28 million
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There is a certain amount each month for long standing service; more than MVR 4 million is given to 2,000 people
Sujatha said that when the pension system was introduced to honour those who served for a long period of time, they would have deposited the amount to 14% of the period they had served. Therefore, there is no need to give any additional pension for recognition of services, she said.
"It will be given to every person who has been in service for account opening [14% so as not to start from zero]. That's why I'm saying that it is a recognized past service. Also, if the person is on the job, they will contribute every month and the state will also contribute to government employees," she said.
“For the entire period in an individual's job, it has contributed to the pension account. Then we come from outside, for example, different institutions look at the duration of service again and we have different formulas in different places, which are given to everyone as a lump sum, an amount is there in the retirement package as a lump sum”.
Sujatha said various efforts have been made with different governments over the past 15 years to reduce the additional expenditure on pensions. As such, she said, she has studied the practice in other countries, prepared papers and shared amendments to the law with the finance ministry. However, Sujatha did not say exactly when she did all this.
Maldives has the highest relative spending for the elderly in the whole of South Asia. Maldives' pensions are high even by international standards. A World Bank report noted that:
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The old age pension in the country is high (at least MVR 5,000 per month), and it is unlikely to be sustainable in the future when the working population shrinks and the elderly population grows
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Therefore, the rules for paying pensions should be changed to reduce the cost of the entire system
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When retiring from work, incentives can be introduced to encourage people to save money from their own efforts
