Pension

Private Pension Schemes

Private Pension Schemes in Mauritius are regulated by the FSC Mauritius under the Private Pension Schemes Act (PPSA).

The FSC Mauritius regulates private pension schemes so that they comply with provisions of the PPSA. The main objective is to maintain a fair, safe, stable and efficient private pension industry in Mauritius.

Categories of Private Pension Schemes

Pension Scheme

a scheme which is regulated in Mauritius and licensed by the FSC, with the primary objective of providing pension benefits to beneficiaries in Mauritius.

Foreign pension scheme

a scheme which is regulated in a foreign jurisdiction and authorised by the FSC, with the primary objective of providing pension benefits to beneficiaries.

External pension scheme

a scheme which is regulated in Mauritius and licensed by the FSC, with the primary objective of providing pension benefits to beneficiaries outside of Mauritius. The scheme should hold a Global Business Licence.

Pension Schemes not covered by PPSA 2012

Pension Schemes set up under or as:

– Association registered before the commencement of the PPSA under the Registration of Associations Act
– National Pension Fund (NPF) / National Savings Fund (NSF)
– Civil Service Family Protection Schemes Act
– Statutory Bodies Fund Acts
– Sugar Industry Pension Fund Act
– Local Authorities (Pensions) Act
– Registrar of Association Act
– Individual Pension Plans set up under the Insurance 2005 Act

Types of private pension scheme

There are two types of pension schemes, namely:

Defined Benefit Scheme

Defined Benefit Scheme is where the amount of pension payable to the employee at retirement is linked to a formula to the members’ salaries and length of employment.

Defined Contribution Scheme

Defined Contribution Scheme is where a certain amount or percentage of money is set aside each year by a company for the benefit of each of its employees at retirement. The minimum contribution payable by the employees and/or the employers are fixed in advance, normally as a percentage of salary

Question and Answers

Who are the parties of a private pension scheme?

Parties are:

• Governing Bodies; i.e. Governing body of the Scheme: A body of persons who is ultimately responsible for the administration of the pension scheme, the management of the investment of the assets of the pension scheme, for ensuring adherence to the terms of constitutive documents and provisions of the relevant laws as well as for the protection of the best interests of beneficiaries of the pension scheme.
• Employers
• Employees/ members or contributors
• Professional Advisers
• Scheme Auditor: This is a qualified person who checks the accounts of the pension scheme and prepares the financial statements of the scheme
• Scheme Actuary: An expert on pension scheme assets and liabilities, life expectancy and probabilities (the likelihood of things happening). The actuary works out whether enough money is being paid into a pension scheme to pay the pensions when they are due.
• Scheme Administrator: This is the person who is responsible for the administration of the pension scheme on a day to day basis.
• Investment Manager: This is someone the governing body of the pension scheme appoints to manage the investment of the scheme’s assets.
• Custodian: A person responsible for the safekeeping of assets of the pension scheme
• FSC Mauritius: The Regulator of private pension schemes in Mauritius.

Pension Schemes not covered by PPSA 2012

Pension Schemes set up under/ as:
• Association registered before the commencement of the PPSA under the Registration of Associations Act
• National Pension Fund (NPF) / National Savings Fund (NSF)
• Civil Service Family Protection Schemes Act
• Statutory Bodies Fund Acts
• Sugar Industry Pension Fund Act
• Local Authorities (Pensions) Act
• Registrar of Association Act
• Individual Pension Plans set up under the Insurance 2005 Act

Helpful Tips

‣ Start early – as soon as you start working, think about saving for your future.
‣ If you are given the choice to be member of a pension scheme, join it.
‣ Read the pension documents and ask questions to make sure you understand what are your limitations and benefits.
‣ In case you change job, seek advice with your employer/administrator regarding transfer of pension benefits (portability options).
‣ Insist on getting an annual benefit statement of the private pension scheme to which you are a member.

Question and Answers

What is a Pension?

A pension is the monthly income that a person receives once s/he has retired. On reaching retirement age, a person’s main source of income will be her/his pension. Pension benefits can either be in the form of a cash lump sum paid on retirement date, and/or regular payments made as from the retirement date.

What is a Pension Scheme?

A pension scheme is a savings vehicle/structure in which you can save during your working life and which will provide a pension once you retire.

In some circumstances, your employer also contributes for your pension.

A pension is a long term investment. Private Pension Schemes set up by private companies and service providers provide pension benefits to the employees of the sponsoring employers.

A private pension scheme is an arrangement whereby members of the pension scheme are entitled to benefits upon retirement or upon death or termination of employment due to illness or upon the occurrence of such events as specified in law or in the documents establishing the pension scheme.

Important: a pension scheme is not a bank account where you put money in and take out when you want. It is a long term investment and benefits are paid at retirement.

Who needs a pension?

We may think we will never get old but retirement arrives faster than we can imagine. Therefore, saving for your retirement is essential because everyone has to stop working at some point. Although the Mauritian State provides a basic retirement pension to all citizens who reach 60 years old, depending on relevant conditions being observed, it is unlikely that it is going to give you the standard of living you may want or are used to. You can plan for your retirement by being a member of a private pension scheme.

Why is it important to have a pension?

A pension ensures that you are catered for financially when you have retired. It is recommended to start saving into a pension scheme as soon as possible to ensure you have the standard of living you want when you retire. Therefore, if you want a reasonable income, you must start saving for your retirement as early as possible. The earlier you start the better because it is cheaper to save over a longer period of time as you will end up with more money put aside to provide for your pension.

How to invest in a pension scheme?

You can invest in a pension scheme:

• Through your employer: your employer contributes to a pension scheme for you (percentage of contribution may vary per employer)
• With another pension scheme (non-occupational) of your choice.