Pension Contributions Must Be Paid in Rufiyaa Regardless of Salary Currency

The Maldives Pension Administration Office (MPAO) has clarified that all employer and employee pension contributions must be made in Maldivian rufiyaa, even for staff who receive their salaries in US dollars or other foreign currencies. The clarification follows reports that some parties were making pension payments in US dollars. The MPAO emphasized that the Maldives Retirement Pension Scheme operates exclusively in the local currency, and all participants are legally required to adhere to this standard. Under current pension law, the mandatory contribution structure requires employees to contribute at least seven percent of their basic salary monthly, with employers matching that amount with an additional seven percent. For those earning in foreign currencies, the Pension Office converts the basic salary into rufiyaa to determine the contribution amount, which is then paid into the scheme in the local currency. This currency requirement extends beyond contributions. The MPAO records all investment returns and disburses retirement payments solely in Maldivian rufiyaa, ensuring consistency across the scheme's financial operations. The Pension Office further stressed that these established procedures are not a new policy change, nor are they linked to the Maldives Monetary Authority's (MMA) current foreign-currency regulations. These rules have been in place to maintain the operational integrity of the retirement fund. The announcement comes amid a broader economic trend where foreign currency usage in the Maldives remains above 40 percent, according to the central bank. US dollars continue to be widely used for salary payments and various commercial transactions across the archipelago. However, the MMA is actively working to reduce this reliance. The central bank has set a target to increase demand for the Maldivian rufiyaa by shifting more transactions toward the local currency by 2030, signaling a long-term strategic move toward greater monetary sovereignty.