Foreigners’ enrollment extended while Majlis considers amendments to Pensions Act

The Maldives Pensions Administration Office (MPAO) has extended enrollment for foreign employees onto its retirement pension scheme until May 15 following an amendment introduced in the Majlis earlier this week.

The enrollment of foreign workers into the scheme – mandated by the first amendment to the 2009 Pensions Act – was scheduled for completion today (April 1).

“We had decided that the date of enrollment should be before 1st April 2014, but now there is a proposed amendment to the Pensions Act in the parliament to make it voluntary for foreigners,” said MPAO Director Ismail Sujau.

“We are giving the delay for one and a half months for foreigners to complete their enrollment and also pay the contributions,” he added.

Sujau confirmed that the scheme will require a contribution of seven percent of employees’ earnings, matching a seven percent contribution from their employers.

The collection of contributions will be still be collected by employers before the end of April, to be handed over to the pensions office by May 15 as originally planned, he explained.

The proposed amendment – submitted by Maavah MP Abdul Aziz Jamaal Abubakr earlier this week – has been welcomed by many expatriates who fear they will struggle to reclaim their contributions upon leaving the Maldives.

“My biggest concern is not getting our money back when we leave, and if we do get it back, getting it back in rufiyaa,” said Varsha Patel, a teacher at Lale Youth International School in Malé.

“Why don’t they just call it an income tax rather than pension?” asked former teacher Rachel Evans*, aged 35.

“Nobody is dumb enough to believe we’re ever going to see that money again. It takes six months to get work visas processed. No way will they ever be able -or willing – to refund this pension at the end of a foreigner’s contract,” she added.

After submitting the amendment this week, Abubakr told local media he felt it would be better for both employees and employers to make the scheme voluntary for foreigners.

“Its enforcement may create difficulties for the employee – it may even result in monetary problems. If he can’t attain his money when he is about to leave the country, then he would face many difficulties. That would even be against his rights,” the Maavah MP told Haveeru.

Contribution concerns

Speaking with Minivan News today, Sujau assured that the regulations allowed for the retrieval of funds, but admitted that specific details of the rebate mechanism were yet to be decided upon.

“There has been a lot of concern – we understand that – even when we have had so many public information sessions,” he said.

“We have heard many concerns, especially when they withdraw the funds. We are collecting the funds in Maldivian rufiyaa and definitely we are paying out in Maldivian rufiyaa so they have a concern because local currency they make not be able to take it back and trade. They can only trade to dollars or some other foreign currency.”

Sujau said that the contributions will be transferred to rufiyaa denominated accounts, or given out in cash, though he acknowledged that transfers to foreign currency accounts had not yet been organised.

“That arrangement we have not been able to make yet. This something we will look into as it progresses.”

A heavy import-export imbalance in the Maldives results in a perennial foreign currency shortage, while a dominant tourism sector – which deals almost exclusively in US dollars – results in a weak local currency.

“What’s the point of them refunding a worthless currency when they could just call it an income tax and keep the money”, asked Rachel.

Meanwhile, Varsha – 26 -suggested that employees had been given inadequate notice of the scheme and insufficient information about how to reclaim contributions.

“We were not really given enough notice – I was only told last month. I’m not very happy to be having a pay cut for no reason.”

After the introduction of the 2009 Pensions Act, the initial regulations made no distinction between local and foreign employees – who were both included in the first phase of the scheme for public sector workers, explained Sujau.

However, just prior to the adoption of private sector workers into the scheme in  May 2011, an amendment was passed requiring separate regulations for foreigners to be drafted within 12 months, and for enrollment to be completed within three years.

Regarding complaints about the scheme, Sujau noted that his office was responsible only for the practical application of governmental decisions.

“As far as the MPAO is concerned, we are an implementing agency, we don’t make policy – we just adopt whatever is in the Pension Act and follow,” he said.

*Name changed as individual wished to maintain anonymity


4 thoughts on “Foreigners’ enrollment extended while Majlis considers amendments to Pensions Act”

  1. Yes so we pay into a scheme that is still being confirmed -- and when we leave we have to wait to get our money... So the government will pay for our accommodation whilst we wait then.......

  2. its a scheme of money to be collected that will go to the pocket of government official.

  3. Hameed just wants a higher quality hooker. But maybe paying into this "scam" will bring some more entertainment on youtube courtesy of the honorable judge.

  4. Well, if they are making it "voluntary" then why do they still need to collect the contribution before the end of April? What if I "voluntarily" want to opt out of this monetary scam of Foreign Pension Scheme by Maldives government?


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