Pension Office

When investing the pension contributions, Pension Office adheres to the regulations outlined in the Pension Act, as well as investment strategies determined by the Statement of Investment Principle (SoIP) and Strategic Asset Allocation (SAA), formulated by the Investment Committee and endorsed by the Board of Pension Office.

Investable Assets

MRPS investments can be made in the following asset classes in the Maldives as per the Maldives Pension Act:

Bank accounts and monetary funds such as bank deposits, held in banks licensed by the Maldives Monetary Authority, which are not under enforcement action and are not subject to suspension of licence.

Securities issued by a relevant body of the Government of Maldives and to the extent guaranteed by such a body.

Securities issued by business entities listed on a licensed stock exchange in the Maldives.

Mutual and investment funds duly approved in the Maldives.

The Pension Act also allows MRPS to invest overseas in the asset classes listed above.

The Pension Act does not allow MRPS investments to be made in the following asset classes:

Securities which are not listed and traded publicly.

Assets which are not capable of alienation from other assets by law.

Certain types of derivative instruments determined by the Securities Market Regulator.

Real estate and other assets which are not listed on a regulated market and for which valuation is uncertain.

Other types of assets determined by the Securities Market Regulator.

Asset Allocation

Strategic Asset Allocation (SAA) is an investment strategy that aims to balance risk and reward by apportioning a portfolio’s assets according to an investor’s goals, risk tolerance and investment horizon. Diversification of investments and achieving the best possible risk-adjusted returns is a priority of the Pension Office.

The current Strategic Asset Allocation of the MRPS Investment Fund and MRPS Sharia Fund is:

Investment Fund	Sharia Fund	Target Allocation
Core Portfolio		Minimum 60%
Domestic Fixed Deposits	Domestic General Investment Accounts (GIA)
Domestic Treasury Bills	Sharia Compliant Treasury Instruments
Domestic Treasury Bonds
Performance Seeking Portfolio		Maximum 40%
Domestic Investment Portfolio
Corporate Bonds	Corporate Sukuks
Equity	Sharia Compliant Equity
Open-Ended Vehicles	Sharia Compliant Open-Ended Vehicles

The current Strategic Asset Allocation of the MRPS Conservative Fund and MRPS Sharia Conservative Fund is:

Conservative Fund	Sharia Conservative Fund	Target Allocation
Core Portfolio		Minimum 86%
Domestic Fixed Deposits	Domestic General Investment Accounts (GIA)
Domestic Treasury Bills	Sharia Compliant Treasury Instruments
Domestic Treasury Bonds
Performance Seeking Portfolio		Maximum 14%
Domestic Investment Portfolio
Corporate Bonds	Corporate Sukuks
Equity	Sharia Compliant Equity
Open-Ended Vehicles	Sharia Compliant Open-Ended Vehicles

Tactical Asset Allocation: While striving to adhere to SAA targets, MRPS is allowed to deviate within ± 10% of the Strategic Asset Allocation for both Investment and Sharia Fund, to capitalise on market opportunities as they arise. However, any deviations from the target allocations must be rebalanced and brought back to the original target allocation within a period of six months.

Investment Process

MRPS engages in both weekly investments and major investments, based on the available investment opportunities. Weekly investments consist of investment in money market instruments such as treasury bills and bank deposits for the purpose of facilitating efficient liquidity management.

Major investments are focused on assets such as treasury bonds, corporate bonds, and equity, with the aim of portfolio diversification and maximization of return. The Board of Pension Office has the ultimate responsibility of approving MRPS investments, except for weekly investment decisions delegated to the Chief Executive Officer (CEO).

Investment Evaluation

Major investments undertaken from MRPS are evaluated prior to investing as per the Regulation on Investment Screening and Due Diligence (2023/R-166).

Initial Investment Screening

Investment Due Diligence

The issuer can submit the Investment proposal prior to listing for an investment opinion by the Pension Office.

All the documents required to facilitate the screening process should be shared with the Pension Office.

During the screening process, in addition to the required documents, the Pension Office may request for additional information.

During this stage, the Pension Office may provide suggestions for enhancing the proposal by recommending amendments or additions to terms of the proposal.

An in-depth due diligence is conducted for public and private listed securities prior to investment.

Even for an investment proposal that was previously screened, due diligence will be carried out upon listing the securities.

A minimum of 45-days is recommended from the Pension Office for the due diligence process.

Due diligences conducted are reviewed by the Investment Committee. The final decision for the investment will be determined by the Board of Pension Office.