President Dr Mohamed Muizzu ratified the sixth amendment to the Maldives Pension Act on Thursday, allowing pension funds to be used as collateral for housing loans and withdrawn for terminal illness treatment and Hajj expenses.
The bill was passed during the 19th sitting of the first session of the People’s Majlis for 2026, held on 14 May.
According to the amendment, the changes introduce revisions to the principles governing the basic pension scheme, expand the circumstances under which pension savings can be accessed, and strengthen the structure and administration of the national pension system.
Changes to Basic Pension Eligibility
Under the amendment, individuals whose income exceeds the amount granted under the senior citizens’ basic pension scheme will no longer qualify to receive the pension.
Separately, on 17 May, the Maldives Pension Administrative Office (MPAO) amended the Regulation on Basic Pension for Older Persons to suspend pension payments for individuals re-employed by the state or state institutions under the Re-Employment Act.
The regulation came into force following publication in the Government Gazette.
Pension Funds for Housing
The amendment allows individuals to use money in their pension fund as collateral when obtaining financing to build, renovate or purchase a residential home.
The provision applies when housing is financed through a bank loan or another approved financing institution.
Under the amendment, collateralisation means the financing institution can access pension savings if the individual becomes unable to repay the loan.
Access to Funds for Terminal Illness
The amendment also permits early release of pension savings for individuals diagnosed with terminal illnesses, even if they have not reached pension age.
A terminal illness is defined under the law as a condition where, despite adequate medical treatment, a specialist doctor determines the individual is unlikely to live longer than 12 months.
Eligible individuals may withdraw their pension savings either in full or in instalments.
Pension Savings for Hajj
The revised law further allows pension savings to be used to reserve Hajj placements in advance.
Under the amendment, individuals who have already paid 20 per cent of the required Hajj payment to a government-approved company may use pension funds to cover the remaining 80 per cent.
Changes to Pension Board Structure
The amendment also changes the composition of the pension board, increasing its membership from eight to nine members.
Under the revised structure, the board will consist of:
- A chairperson
- A civil servant representing the finance ministry
- A civil servant representing the social security ministry
- A civil servant representing the employment ministry
- Five representatives from the private sector
The previous structure under the fifth amendment included four private sector representatives and a representative from the securities regulator. The securities regulator position has now been removed.
The amendment also establishes the Chief Executive Officer (CEO) as the highest-ranking official at the pension office. The pension board will be responsible for appointing and dismissing the CEO.
A CEO must be appointed within 60 days of the amendment coming into force, while any newly created positions introduced under the amendment must be filled within 30 days.
Existing pension board members will remain in their positions, except for the member representing the securities regulator.
Participation of Self-Employed Individuals
The amendment also requires regulations to be developed outlining how self-employed individuals can participate in the pension scheme.
It further specifies that employers must deposit pension contributions into accounts designated by the pension office on behalf of employees.
According to the amendment, all regulations required under the revised law must be developed by the relevant authorities within three months of publication in the Government Gazette.
