FAQs on Maldives Retirement Pension Scheme (MRPS)

1. What is MRPS

MRPS stands for Maldives Retirement Pension Scheme. The purpose of MRPS is to provide the participants with a regular retirement pension. The Scheme is funded through contributions from employees and employers while in employment.


2. What is a defined contribution scheme?

A defined contribution scheme is a pension plan whereby employer and employee contribute a defined amount while in employment on a monthly basis. In case of MRPS, the mandatory contribution is 14% (which is 7% from the employees and 7% from the employer) of the pensionable wage of the employee. Under this plan the pension benefit payout at retirement is based on the amount the participant has contributed over his/her working life, plus any investment returns.


3. What is Pensionable Wage?

Pensionable wage is the basic salary specified in the contract of employment.


4. Am I required to participate in this scheme?

Under the Pension Act, participation is mandatory for all employees where there is a contractual relationship with an employer, and in case of self-employed the participation is voluntary.


5. What would be the administrative arrangement for an employee to participate in MRPS?

All administrative arrangements including registration of the employee, submission of contributions statements and payment of contribution is a responsibility of the employer.


6. What are the administrative arrangement to register, enroll employees, submit Statement of pension Contributions (SPC) and settlement of payments?

Employers are required to register in the MRPS by filling the registration form. This can be downloaded from the MPAO website. After this process the employer will be notified with an employer ID and a passcode by MPAO.

Employer may then log into the MRPS portal using these credentials and enroll all employees in MRPS.

Employer then can submit monthly SPC’s and receipt notices could be generated through the system.

The employer then should raise a cheque to the amount indicated in the receipt notice and take both the cheque and receipt notice to any branch of Bank of Maldives (BML) before 15th of following month after the payment of monthly salary. Failure to submit SPC on time would result in the employer being fined.


7. Can my employer make the total contribution on my behalf?

Yes. The Act does not restrict the employer to make the full 14% of the contribution on behalf of the employees.


8. I have a company/Shop that does not have any employees. Do I still need to register in MPRS?

No. if you do not have any employees it is not necessary to register as an employer in the MRPS. But as soon as an employee is been recruited you will be required to register in MRPS.


9. Is it mandatory for expatriates to participate in MRPS.

It is not mandatory for expatriates to participate in MRPS. Under the 2nd amendment to the Pension Act, participation of foreign employees in the Retirement Pension Scheme has been made voluntary. Foreign employees who wish to participate in the Retirement Pension Scheme may participate and contribute to the scheme, provided that their employers are willing to pay the employer contributions and undertake the required administrative work. 


10. What happens with the money in my Retirement Savings Account (RAS) if I die before I reach pensionable age? And what happens after I reach pensionable age and already withdrawing from RSA and there is remaining amount in RSA at the time of death?

The money in your account legally belongs to you. Therefore, if you die before reaching pension age or after and withdrawing or not, the total or any remaining amount in your RSA will be paid to your legal heirs. Payment shall be made in the form of a lump sum to beneficiaries determined through inheritance law and the money will be disbursed through the courts.


11. What happens to my retirement savings account when I change jobs?

Any time you change jobs, you will still keep the same retirement savings account. Your new employer will be responsible for making contributions to your existing account. In other words, no matter how many jobs you have been employed during your career, you will have only one retirement saving account that will be maintained by MPAO.


12. I have an illness, injury or disability. Can I spend the money in my retirement savings account for medical purpose?

At the moment it is not possible to withdraw money in your retirement savings account to meet your medical expenses. However, disability benefit is part of the scheme that will be addressed in future.


13.How do I know how much money I have in my retirement savings account?

The pension office will provide individual member account statements at least once in a year. The statement will provide the details of your RSA

You can view your Retirement Savings Account statement through MPAO website at any time or request for a written statement. 


14. Who is responsible for investing pension assets?

MPAO is responsible for investing pension assets. MPAO can also assign asset managers to manage the pension assets. The board is responsible for the oversight of the investments.

The Pension Act requires the formation of investment committee as a subcommittee of the board. The Investment committee formulates the Statement of Investment Principles (SOIP) which provides guidance on Investment Strategy and risk management in line with Pension Act.


15. How would the pension assets be invested?

Pension Act states that assets should be invested in a prudent manner, that is solely for the benefit of the participants. Pension assets can be invested in securities that are publicly traded, issued by banking institutions that are appropriately licensed and securities of the government, The Board of MPAO is required to make its investment decisions with the following objectives in mind:

• Security of assets

• Diversity of assets

• Maximum return while minimizing risks

• Maintenance of adequate liquidity.


16. How can I be sure that my contributions to the retirement pension scheme are safe?

The Pension Act provides several safety measures to protect the pension assets. The Board and everyone responsible for administration and management of pension assets are fiduciaries to the scheme. The act also requires the appointment of a Custodian to safeguard the pension assets. Furthermore, CMDA ensures the pension assets are invested in accordance with Pension Act and SOIP , CMDA conducts regular inspections of MPAO and Custodian and they are empowered to seek any additional information they see fit from MPAO, Custodians and Asset Managers. Under the Act MPAO is required to publish Annual Audited Financial Statements.


17.How do you calculate the amount an individual can get as Retirement Pension?

Calculation is triggered automatically when the person reaches 65 years and is independent of receiving a pension benefit claim.

In the interim, monthly pension payment is calculated by dividing the balance in his/her RSA at the time he/she reaches 65 years by life expectancy at the age of 65. At present as per WHO figures the life expectancy at the age of 65 for Maldivians is 79 years. Thus pension benefits will be calculated for 14 years which is 168 months.

In case the monthly payout is less than MRf2300, this amount will be paid until the RSA balance is exhausted. However, pensioners may opt to choose Annuities in future with the development of the Insurance sector.


18. How long will it take to claim the pension funds?

Pension Office will inform the individual (participant) 6 months prior attaining pensionable age(65 years) to fill-up application and submit to Pension Office to claim benefits soon after reaching 65 years or any day after. Provided the pensioner wishes to receive the pension at the pensionable age, the pensioner should apply at least 45 days before this date.


19. How do you deposit the money paid as Retirement Pension?

Pension withdrawals will be deposited to a single or joint bank account (Maldivian Rufiyaa) of the individual in the territory of Maldives.


20.Can I qualify for both retirement pension and old age basic pension when I reach pension age?

A pensioner can qualify for both retirement and basic pension at the pensionable age of 65 provided that if the retirement pension monthly calculated value is below, twice the amount of basic pension. In such cases, 50% of the retirement monthly calculated amount shall be deducted from the designated basic pension monthly amount.

For example-

Retirement monthly calculated amount is MRf. 3000

Basic pension designated ceiling amount MRf. 2300

Calculation – 3000 * 50% =1500

2300-1500

Basic pension monthly eligible amount = MRf 800/-

You can qualify for both pensions upon reaching 65 years of age. However, please note that if the amount received under Maldives Retirement Pension Scheme or any other Pension is less than twice the amount of Basic Pension, 50% of that Pension shall be deducted from the Basic Pension.


21. How do I qualify for an early payment?

You can qualify for an early pension if you are at least 55 years of age and you have enough money in your account to provide a lifetime monthly payment (based on life expectancy at the age 55) that is at least twice the amount of the old age basic pension prevailing at the time of retirement.


22. When will I have access to the funds in my retirement saving account?

You can only access the money in your retirement saving account when you reach 65 years of age and only for monthly payment amount, unless you qualify for an early pension withdrawal.

23. Do you charge an administration fee from MRPS members?

Yes, the administration fee is charged to recover the cost of administering the pension scheme, which include, but not limited to, the cost of recordkeeping, investment management, financial transaction costs, custodian fees, and audit and other compliance costs.

Administration fee is reviewed annually. The administration of the current year is 0.90%. Administration fee is charged on members’ balance at the end of each month. The calculation is as follows;

Members balance at month end x 0.90%/12*actual no of days/no of days in the month