New Pension Fund Scheme for Local Authorities Employees

mauritius retirement

GIS - August 14, 2012:

A new pension fund scheme for employees of local authorities will be created in the weeks to come. This was announced by the Minister of Local Government and Outer Islands, Mr. Hervé Aimée during a press conference held in Port Louis yesterday.

Government has agreed to the State Insurance Company of Mauritius Ltd (SICOM) setting up a separate pension fund for each local authority in which the local authorities will be authorised to transfer their accumulated pension fund as at 31 August 2012. Hence, SICOM will pay pension benefits to employees retiring as from 1st September 2012. As at 30 June 2012, the accumulated fund kept by the local authorities amounted to some Rs 688m. This sum represents the contributions made by employees as from 1st July 2008.

There are some 2,100 existing pensioners and the annual pension amounts to about Rs 204m. With the transfer of the pension fund to SICOM, employees of local authorities retiring prior to 1 September 2012 will be considered as existing pensioners and will be paid pension from the recurrent budget of local authorities.

In the Budget speech 2012, the Minister of Finance and Economic Development outlined that the management of the pension fund of local authorities needs to be professionalised and SICOM was earmarked to be entrusted with the pension fund. Moreover, section 81 of the Local Government Act 2011 provides that a Municipal City Council, a Municipal Town Council or a District Council, shall establish a pension fund to be administered by SICOM.

This project guarantees the payment of pension and retirement benefits to each and every employee of a local authority. SICOM is already administering around 120 such pension funds for parastatal bodies and other government-owned institutions under this structure.