MP Kudu: Pension fund transaction breaches financial laws; Parliament must clarify its stance

North Galolhu MP Mohamed Ibrahim (Kudu) has submitted a resolution to Parliament calling for members’ views on the MVR 2.4 billion transaction carried out by the Maldives Pension Administration Office, warning that the move may breach multiple financial laws and undermine the security of pension assets.

The resolution states that the Maldives Monetary Authority (MMA) placed MVR 2.5 billion from the pension fund into a government bond. Following the decision, several senior officials of the Pension Office resigned, including Board Chair Dr Ahmed Inaz, Chief Executive Officer Sujatha Haleem, Chief Financial Officer Hawwa Fajwa, and board member Saruvash Adam, who represented the private sector.

Kudu argues that the transaction could increase state expenditure beyond the amount approved in the budget without parliamentary consent, which he says contravenes the Public Finance Act, the Pensions Act, and the Fiscal Responsibility Act.

The resolution highlights that:

• Public Finance Act (3/2006) prohibits spending state funds or disposing of state property except as provided in the Act and its regulations.  

• Pensions Act (8/2009) requires any proposal by the government or any other party regarding the investment of pension assets to be made in writing and made public.  

• Fiscal Responsibility Act (30/2024) allows short‑term borrowing for cash‑flow management only as advances of up to 91 days, and not exceeding 2.5 percent of government revenue.

According to the resolution, the government is attempting to withdraw money from the pension fund through an “illegal transaction”, and the resignations of experienced senior officials show the seriousness of the risks involved.

Kudu warns that the move threatens the independence of the pension fund and could erode confidence in the wider financial system. He also claims the transaction could weaken the rufiyaa and drive up the prices of goods and services.

The resolution further states that the government is acting outside what Finance Minister Dr Mohamed Shafeeq outlined in this year’s budget, without seeking parliamentary approval or even notifying Parliament.

Kudu said that, in order to fulfil Parliament’s constitutional duty to hold the government accountable, MPs must clearly state their views on the Pension Office transaction.

In addition to experts in the field, the MDP and former President Abdulla Yameen Abdul Gayoom have also publicly expressed dissatisfaction with the pension fund transaction.