Relevant state agencies have endorsed proposed amendments to the Pension Act, which seek to provide greater financial flexibility to pension holders.
The legislative reforms proposed earlier this month, include provisions allowing pension funds to be utilised for housing construction and repairs, early withdrawals for those suffering from terminal or serious illnesses, and advance reservation of pension fund allocations.
During the Parliamentary Independent Institutions Committee bill review meeting, representatives from the Ministry of Finance and Planning, the Maldives Pension Administration Office (MPAO), the National Pay Commission, and the Maldives Inland Revenue Authority (MIRA) convened to discuss the implications of the amendments.
The Ministry of Finance commended the proposed changes, emphasising that while the policies are progressive, careful attention must be given to rule-making to avoid regulatory conflicts in implementation.
The Finance Ministry representative backed the proposed amendments, but pointed out that their execution must be structured to prevent unintended complications.
The MPAO and the Pay Commission also lauded the amendments, particularly highlighting the positive impact on beneficiaries facing urgent financial needs, such as housing-related expenditures and medical emergencies.
However, MIRA has urged for clarity in the legislation regarding potential tax implications, specifically when large lump-sum withdrawals occur. The authority has recommended explicit provisions on whether such disbursements will be subject to income tax to prevent future disputes.
Meanwhile, some institutions involved in the consultation process have requested a window for submitting written feedback to ensure thorough deliberation before the bill progresses further.
If passed, these amendments could mark a significant shift in pension fund accessibility, offering beneficiaries greater control over their retirement savings in times of critical need.