Economic Minister rejects notion of using Pension Fund for virus relief

Economic Minister Fayyaz Ismail is photographed at a press conference. (Photo/NEOC)

Economic Minister Fayyaz Ismail has stated that the government was not considering to use the Pension Fund as a source of finance in assisting individuals during COVID-19.

The Pension Fund of the Maldives was established during the administration of President Mohamed Nasheed and collects a certain amount from employees and employers to be used.

Rhetoric indicating that the government may resort to these funds to assist people who have lost their jobs or are faced with income shortages due to COVID-19 has been rumored around recently.

However, in a press conference today, Economic Minister Fayyaz Ismail, who oversees the relief packages of the government and economic situation of the Maldives due to the virus, quashed the entire notion when he stated that reaching to pension funds was not something practiced anywhere in the world.

The Minister stated that the government would only resort to such a measure if there was no other possible way. 

“If there is a difference of ideology, then the parliament will repeal the pensions if they wish to. Today, we are following as how pensions should be,"

"As the Economic Minister, I am stating that we have to find alternative sources without touching the pension fund. If it reaches there, then we will do it. If there is no other option then it must be done…right. However, I still do not believe that we have reached a point where we have to touch the pension fund.” Said the Minister.

The Pension Fund is operated by investing the funds it receives and increasing its profits. The fund is used after it generates enough to suffice for all in retirement age.

Minister Fayyaz also said, “It may not be a good idea, reaching into the pension fund every time we are faced with something. We may have to see in the future, to introduce a provident fund in addition to the pension fund.”.

The allowance that retirees in the Maldives are entitled to each month comes from the Pension Fund. Other than this, the fund can also be used to make down payments on homes as well as the holy pilgrimage to Mecca.