What happened with the Pension Office CEO?
As the agency managing over MVR15 billion in funds, it is imperative Pension Office explain the reasons behind the dismissal of its CEO — an action that prompted two board member resignations.
On 13 October 2021, an official from the Maldives Pension Administration Office (MPAO) confirmed that its Chief Executive Officer, John Grindall, had been dismissed by the Board for breach of conduct. The details of the breach were not provided, and until now, the office has not issued any official announcement or statement. On the same day, two members of the MPAO board, both representing the private sector, also resigned. Again, no official statement or explanation was given. One of the board members, however, confirmed to MFR that their resignation was based on disagreements over the decision to remove the CEO.
Six weeks ago, on 2 September, the same official from the MPAO denied reports in the local press that the CEO has been suspended due to allegations of sexual harassment of an employee — the official also confirmed that no case of sexual harassment had been filed against the CEO.
The MPAO board appointed John Grindall as the CEO in December 2020, more than a year since the first recruitment announcement for the position was made in August 2019, and one year after the outgoing CEO, Mohamed Hussain Maniku, completed his 10-year term in office. Unlike Maniku, Grindall was paid a basic salary of MVR123,360, plus an executive allowance of MVR92,520, totalling MVR215,880 (USD14,000) per month. Meanwhile Maniku's salary had not been more than USD4,000 per month.
The MPAO, in its 2020 Annual Report stated that its vision is "to be the most trusted, respected, and loved public institution in the Maldives," with their core values stated as "Integrity, Communication, Team Spirit, Innovation, and Excellence."
With stated standards of aiming to attain high levels of integrity and transparency, the MPAO, responsible for managing over MVR15 billion in pension funds, has been very silent as to why it had fired its CEO in less than 12 months – a CEO selected after 12 long months of head hunting.
The MPAO is governed by an eight-member board, as stipulated under the Pension Act, with representatives from the Ministry of Finance, the ministry responsible for social security and four members from the private sector, as well as a chairperson. A representative from the Capital Market Development Authority (CMDA) also sits on the board as a non-voting member.
Section 6(f) of the Maldives Pension Act gives the board the power to "employ and dismiss personnel required for the operation of the Pension Office including the appointment of a Chief Executive Officer." The board is also required to prepare the operational budget of the pension office, which under the law is financed by charging a reasonable fee from the members of the Maldives Retirement Pension Scheme (MRPS) - this means that a portion of pension contributions are used to finance the operations of the office.
According to the MPAO Annual Report, 102,689 active employed Maldivians contributed over MVR93 million per month as contributions to the MRPS, as of end-2020. As of October 2021, the MRPS has collected a total of over MVR10.1 billion as contributions from employees and employers. Since 2017, annual contributions have exceeded MVR1 billion.
Accumulated members' balance as at end 2020 had been MVR15.7 billion, of which over MVR11.1 billion or 71 percent is invested in government treasury bills and bonds – this means that the MRPS is being used to finance the government's fiscal deficit. While the returns on this investment are reasonable, one questions the diversification strategy employed by the MPAO to ensure that not all funds are invested in the same basket.
It is reasonable for the public to expect more than a cursory, passing note to state that the CEO of the office that manages this vast public fund, has been dismissed for breach of conduct. What kind of breach? Was it administrative, dealing with the investment funds, fraud, embezzlement, sexual harassment? Was it serious enough to warrant an investigation or file charges? Why did two members of the board decide to resign from the board over the decision of the board? The disagreement must have been substantial to motivate two members to resign. These are all questions that need to be asked and answered, especially keeping in mind that these funds will provide security for those who retire.
In keeping with the spirit of integrity and transparency that the office aspires to, should they not be more forthcoming?
