As the Maldives gears up for the second round of its presidential election on 30th September, opposition Progressive Party of Maldives (PPM)/ People’s National Congress (PNC) candidate Dr Mohamed Muizzu has put the spotlight on pension fund reform.
Speaking in Mahibadhoo, Alifu Dhaalu Atoll, Muizzu criticised the existing management of the sizeable pension fund, calling for significant amendments to unlock its potential benefits for citizens.
According to Muizzu, the pension fund currently holds MVR 20 billion, contributed equally by employees and employers at a rate of 7% each. Despite annual deposits amounting to MVR 100 million, Muizzu argues that the fund’s utilisation falls short of serving the best interests of the people.
In a bid to enhance the effectiveness of the pension fund, Muizzu laid out his intentions to broaden its scope through increased investments. “We aim to expand the fund’s capacity and also provide more opportunities for people to reap its benefits. To achieve this, my administration will work closely with the parliament to introduce legislative changes,” he said.
Muizzu highlighted three specific areas where he believes the pension fund could be better utilised:funding home construction, financing overseas education for children, and investing in entrepreneurial ventures.
At present, the fund is primarily used for apartment loans and Hajj pilgrimage expenses, with payouts happening at retirement ages of 55 or 65. Muizzu contends that such limitations result in inadequate satisfaction among people who have contributed to the fund for years.
To expedite access to the pension fund, Muizzu also proposed a radical shift in the fund’s disbursement timeline. “People shouldn’t have to wait three to four decades to access the benefits. I propose that after a decade of contributions, individuals should be able to draw from the fund in proportion to their contributions,” he explained.
With these substantial changes on the horizon, Muizzu is targeting the pension fund as a central plank in his policy platform, aiming to demonstrate his commitment to improved social welfare and financial freedom for Maldivian citizens.
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