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Myanmar to make civil service pensions compulsory under proposed legislation, report says

The new pension system is applicable to civil servants with less than 10 years of service
By Goh Thean Eu   
August 3, 2020

Myanmar will make pension contributions compulsory for the civil service under proposed legislation that is now with the Cabinet, according to the Myanmar Times, a local English language newspaper.

U Maung Maung Win, the deputy minister for planning, finance and industry, is quoted as saying he submitted the Central Provident Fund Bill to the Cabinet on July 28.

“It is compulsory for all civil servants who have less than ten years service and who haven’t been entitled to pension benefits. Civil servants who have more than ten years of service will continue enjoying retirement gratuities in accordance with the rules of the older system,” Mr. Win says in the July 30 report.

Civil servants in Myanmar currently don’t have to contribute to a pension fund. The government pays monthly pensions to retired civil servants based on their last salaries and years of service.

According to Mr. Win, the current system is increasing the government’s financial burden because payments are rising as the number of pensioners grow.

Government officials in Myanmar could not be reached for comment.

Compulsory civil service pension contributions have long been the norm in a number of Myanmar’s neighbours in Southeast Asia, including Thailand and Malaysia.

According to latest available figures published on the Myanmar pension department’s website, the government paid 683.83 billion kyat (US$449.26 million) in pensions and gratuities as of end-March 2017, up almost 60% from 428.70 billion kyat a year earlier. The number of pensioners increased 7.51% from 842,560 to 905,825 over that period.