Securing dollars for foreign investment from Pension Fund difficult: Sujatha

Pension Office said today that opportunities for local investment from the Maldives' Pension Fund are limited, and securing US dollars for overseas investments is also proving to be challenging.

Speaking at the Parliament's Committee on Independent Institutions, Pension Fund CEO Sujatha Haleem stated that in the past month alone, MVR 100 million was spent on the 23,000 participants in the pension fund. Additionally, MVR 33 million was issued for other pensions, she added.

Sujatha Haleem also revealed that 122,000 people have opened accounts under the retirement pension scheme, with individuals depositing a total of MVR 143 million monthly. She explained that the goal when investing this money is to achieve an average return of at least 50 percent. The office consistently seeks out the best investment options with the highest returns, she added.

As such, they are currently investing in banks, securities, stock exchanges and funds which are all approved by Maldives Monetary Authority (MMA). Due to this, the profit percentage is maintained at an average of five percent, Sujatha said.

"So far MVR 5.1 billion has been received as full fund (profit)," she said.

Currently, the Pension Office's largest investment is in treasury bills. Additionally, they have also been investing in the Private Place Market Stock Exchange whenever possible, since last year, she said. However, there are challenges when it comes to foreign investments, she highlighted.

"The challenges for investing from the Pension Fund is that there are very few investment opportunities locally. Obtaining dollars is not easy. Investments require more effort and strengthening. We are putting in a lot of effort from our side. A lot of work is being done with the government too. Expanding investments is something we want to do. [We] want to take this international or develop this [further]," Sujatha said.

The previous administration amended the Pension Fund regulations to allow individuals to withdraw funds for housing and Hajj purposes. Sujatha Haleem addressed this change, noting that sudden policy adjustments can also pose challenges.

"Sudden changes relating to pension are a big challenge. Every product we introduce is done so based on a lot of research. When these things come about in other ways, it shakes up the entire system, which is a huge concern," Sujatha expressed.

She also pointed out that since other pensions are also issued in addition to the pension required by the law, some people do not believe in having to deposit funds into the retirement pension plan. She went on to say that while these are expenses that come out of the state budget, and considering that Maldives is moving towards an aging population, this would become strenuous on the state budget.

Another point she highlighted was that although self-employed individuals have the opportunity to participate in the pension fund, many choose not to because they believe the government will provide their pension once they reach retirement age.

"Currently, 80 percent of the workforce is part of the pension fund. We want individuals, self-employed individuals, and those running small businesses to also contribute. Only then can this operate as a complete system," she said.

When asked about measures to prevent the issuance of double pensions, the Pension Office stated that significant efforts have been made to address this issue. They are also providing technical support to amend the relevant laws.