Pension Fund Faces Climate Risk as Maldives Finance Forum Opens with Green Finance Focus

The Maldives Retirement Pension Scheme (MRPS), the backbone of the country's pension system, holds a fund of MVR 30.3 billion comprising 204,549 members, approximately one-fourth of the national Gross Domestic Product (GDP), according to the Pension Office. However, the security of the country's financial market and the people's retirement savings is directly linked to climate change and environmental vulnerability. This year's Maldives Finance Forum 2026, its 13th meeting, has been arranged under the theme "Green Finance: Ensuring Sustainable Investments and Financial Security in the Maldives," and begins tomorrow. Consultations on the matter will proceed at the forum. All the money in the pension fund has been invested in the Maldives. Among these are 52.4% treasury bills, 24.6% treasury bonds, and the remaining 23% fixed deposits and Islamic finance, in addition to shares of Maldivian companies. The money received at retirement is based on the money saved during working years and the investment profits earned on it. Every shock to the Maldives' economy is a danger that directly faces the pension money of members in the fund. The pension systems of small island countries are the systems most exposed to climate dangers. 20% of the Maldives' GDP is contributed by reef-related tourism and fishing, sectors that incur major losses due to climate change. In 2024, due to the heating of the sea's salt waters, coral in a large portion of the reefs of the central atolls died, while fishing has also declined by approximately one-third. Tourism and fishing are sectors that thousands of pension members and workers depend on; when income decreases, the money deposited into the fund decreases, and the amount of pension received at retirement becomes small. It is important to keep the fund's growth above the rate at which the prices of goods rise. In 2025, while inflation stood at 4.0%, the fund had grown by only 1.38%, evidence that the real value of the saved money is decreasing. By the end of August this year, the prices of goods had risen by 0.8 percent. The Maldives is a country extremely dependent on imported oil, and in the first 8 months of this year, expenditure on oil had reached 809 million dollars, a matter that will directly affect economic productivity and the prices of goods. To overcome such situations, Green Finance - financing environmentally friendly sustainable projects - is very useful. Important, large investments are already being made in the Maldives in the renewable energy sector. Countries are taking major steps to increase the sustainability of pension funds and maximize benefits. In 2024, the World Bank and the IMF had provided advice to formulate special guidelines for pension investment regarding climate dangers and sustainability. Among the most important matters that policymakers and experts will consult on at the forum is converting environmental vulnerability into an opportunity for financial growth. Since members' pension money has been invested in the Maldives, protecting the Maldives' economy from climate shocks is directly linked to the future of pension money and the personal interest of every member, the Pension Office notes. The office states that making sustainable investments through Green Finance is the most important step that can be taken to ensure financial security.