Committee votes against lowering pension eligibility age

People’s Majlis Committee on Independent Institutions voted against making an amendment to Pension Act, making 55 year-olds who either retire or are retired, from being eligible for pension.

Committee made the decision during a meeting held on Tuesday, with all committee members voting against the proposed amendment.

Committee made the decision after weighing over the input provided by senior officials from Pension Office and Ministry of Finance – both these institutions had spoken against making the amendment.

Finance Ministry Assistant Director and Head of Budget Division Ali Rasheed said that lowering the age that people can receive pension would put undue stress on state budget, and that the sustainability of pension fund – if such an amendment were to be made – needed to be evaluated.

“We have noted that over MVR 400 million has to be added to budget in 2016. And over MVR 450 million has to be added to budget in 2017. Over MVR 500 million has to be added to budget in 2018. Next I want to note that we are still having trouble managing deficit,” said Ali Rasheed.

Pension Office CEO Mohamed Manik said that he could not support lowering the pension eligibility age as a general rule. He said that changing the pension system and adopting a new one was not smart.

“Pension eligibility age is set high internationally. As a general rule, this is good,” said Mohamed Manik.

The amendment proposed by Hulhu-Henveiru MP, Majlis Deputy Speaker Moosa Manik states that pension eligibility age be lowered from 65 years to 55 years.