MAURITIUS Law and Practice Contributed by: Johanne Hague, Ashwin Mudhoo, Medina Torabally and Yushrah Bayjou, CMS Prism – in association with CMS
8.4 Elder Law Significant changes have been introduced by the Finance Act 2025 regarding retirement planning. Increase in the Basic Retirement Pension The retirement age for the basic retirement pension is being progressively raised from 60 to 65 years as per the transition schedule below. • A person born between September 1965 and August 1966 – eligible at 61 years of age (Septem - ber 2026–August 2027). • A person born between September 1966 and August 1967 – eligible at 62 years of age (Septem - ber 2028–August 2029). • A person born between September 1967 and August 1968 – eligible at 63 years of age (Septem - ber 2030–August 2031). • A person born between September 1968 and August 1969 – eligible at 64 years of age (Septem - ber 2032–August 2033). • A person born on/after September 1969 – eligible at 65 years of age (September 2034 and after). There are transitional measures such as income sup - Prior to the Portable Retirement Gratuity Fund (PRGF), an employer was required to pay a lump sum gratuity upon the employee’s retirement or to their legal heirs upon the employee’s death. This lump sum gratuity was calculated based on the following formula: • 15 days’ final remuneration for every period of 12 months’ employment; and • a sum equal to one-twelfth of the sum payable for 12 months’ employment multiplied by the number of months during which the worker has remained in the employment of the employer, for every period of less than 12 months. port schemes for vulnerable groups. Portable Retirement Gratuity Fund Previously, only the last employer was required to pay this lump sum gratuity. This meant that employees were not able to receive a gratuity which reflected their entire length of service if they changed employers dur - ing their professional career. Further, employers were
finding it burdensome to make a lump sum payment at the end of the employee’s career. In order to remedy these issues, the PRGF was estab - lished in 1 January 2020, with the introduction of the Workers’ Rights Act 2019. Under the PRGF, employ - ers are required to make a monthly contribution to the PRGF instead of paying the lump sum mentioned above as a gratuity upon retirement or death of an employee. The employer is required to make monthly contribu - tions in respect of their employees and file a PRGF return with the Mauritius Revenue Authority (MRA), which is the administrator of the PRGF. PRGF contri - butions are payable as from the month an employee is employed, whether on a full-time or part-time basis and whether on probation or not. The rate of contribution makes up a cumulative figure of 4.5% of the monthly remuneration of the eligible employee. The PRGF contribution is based on the employee’s remuneration, which consists of basic salary, produc - tivity bonuses, attendance bonuses and payment for overtime. It does not include any bonus or allowance which is not related to performance, such as a trans - port allowance, meal allowance or phone allowance. When the employee retires at/after the age of 60 (or earlier under specific circumstances provided in the law) or the employee dies, the MRA pays the accumu - lated fund standing in the individual PRGF account to that employee or their heirs, as applicable. In other words, all contributions made to the PRGF will be used to pay to an employee the lump sum retire - ment gratuity to which they are entitled upon retire - ment or death and which is calculated according to the formula mentioned above. Subject to the proclamation of the Finance (Miscella - neous Provisions) Act 2024, if a public officer appoint - ed before 1 January 2013 dies while in service, the share of contributions that the officer made until the date of their death will be refunded to their heirs.
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