State expenditure on pensions could skyrocket to MVR 7.9 billion by 2055 unless immediate, structural reforms are enacted across the public retirement framework, the Auditor General’s Office warned the Parliamentary Public Accounts Committee. Officials cautioned that escalating retirement obligations represent one of the single largest structural threats to the country’s medium- and long-term fiscal stability.
According to projections from the Maldives Pension Administration Office (MPAO), the government has earmarked MVR 2.61 billion for pension spending in the upcoming annual budget. Without systemic intervention, these costs are forecasted to climb to MVR 4 billion by 2042 before nearly doubling to MVR 7.9 billion by 2055, creating a fiscal burden that risks overwhelming state revenues.
A primary driver behind this rapid increase is the continued operation of parallel and dual pension systems across various state and independent institutions outside the formal Maldives Retirement Pension Scheme. The Auditor General’s Office pointed out that these institutional carve-outs and duplicative arrangements compound liability year after year, committing the government to unsustainable multi-tier payouts.
Beyond pension payouts, audit representatives emphasized that recurrent expenditures remain dominated by public sector wages and allowances. They urged authorities to enforce strict headcount controls across the civil service, prioritize overall workforce productivity, and enhance operational efficiency rather than continually creating new civil service positions.
Addressing the committee, Minister of Finance Moosa Zameer stated that the Ministry, together with the National Pay Commission, is currently conducting a comprehensive civil service audit. Following this review, excess personnel will be redeployed to under-resourced institutions, with future recruitment strictly restricted to essential vacancies across the country’s 34,000-strong civil service.