The Maldives Pension Administration Office (MPAO) has clarified that employers must make staff pension contributions in Maldivian rufiyaa even when they receive their salaries in US dollars or other foreign currencies.
The office issued the clarification following claims by some parties that pension contributions are being paid in US dollars.
The Pension Office noted that the Maldives Retirement Pension Scheme operates in Maldivian rufiyaa. Under the pension law, every employed person must participate in the scheme and make the required contributions.
Regulations under the law require employees to contribute at least seven per cent of their basic salary to the scheme each month, with employers required to contribute at least a further seven per cent.
These requirements also apply to employees who receive their salaries in US dollars or other foreign currencies. In such cases, the Pension Office calculates the contribution after converting the employee's basic salary into Maldivian rufiyaa, while the contribution itself is also made in rufiyaa.
The scheme also handles pension investment returns and retirement payments in Maldivian rufiyaa. The Pension Office records returns earned through pension investments in rufiyaa and uses the local currency to record and disburse pension payments upon retirement.
The Pension Office stressed that these arrangements have no connection to the Maldives Monetary Authority's (MMA) current foreign-currency regulations and do not represent a new change resulting from those rules.
The clarification comes as foreign-currency use in the Maldives remains above 40 per cent, according to the central bank. Foreign currency is currently used to pay salaries and conduct various types of transactions.
MMA aims to increase demand for the Maldivian rufiyaa by shifting transactions towards the local currency by 2030. The authority has said it is working to introduce changes to achieve this objective.