‘Business environment affecting companies’ pension remittance’


Pension fund experts have cited the poor business environment the country has been going through as one of the major reasons for companies’ failure to remit pension contributions.

According to statistics by the Reserve Bank of Malawi (RBM), companies are holding over K9 billion in pension funds.

According to Employers Consultative Association of Malawi (Ecam), a body that represents employers on labour laws and socio-economic issues, the economic environment has not been favourable for businesses.


Ecam President, Beyani Munthali, said one of the major challenges of non-compliance by companies has been that employers have struggled with a negative business environment in the last five years.

He said employers have made commitments to remit pension arrears.

“We hope with the improved economic indicators such as inflation and interest rates, there will be ease of doing business which will lead to better cash flows and increased pension remittance.


“Consider the impact of recurring power shortages too. We have companies spending millions of kwacha on diesel to power up generators and at the same time spending to maintain them because they frequently break down,” Munthali said.

He said despite the challenges, employers are aware of the need to comply with the Pension Act and appreciate pension as a social protection mechanism.

Old Mutual Life Assurance Limited, Managing Director, Tavona Biza, said the situation impacts negatively on the contributing member.

He said members are the ones suffering as they cannot access their funds on time.

Biza, however, concurred with Munthali that the economic situation is forcing some of the companies not to comply.

“There are some companies that are indeed under financial problems, hence their failure to remit the funds while other companies choose not to remit even though they deduct their employees and the pay slips show that funds have been deducted,” he said.

He further said, as fund managers, they engage such companies in talks and advise them to pay up.

“Even the regulator [RBM] is also doing the same, engaging in dialogue with companies that are not remitting the contributions. However, the regulator should do more to ensure that the companies are able to remit the contributions,” Biza said.

Over the weekend, Nico Life disclosed that some companies and institutions owe them K4 billion in pension contributions.

Nico Life Chief Executive Officer, Eric Chapola, said some of the companies have gone over six months without remitting pension funds.

According to Chapola, the development also caught RBM’s attention after bank officials met with some institutions and companies asking them to remit the funds.

Facebook Notice for EU! You need to login to view and post FB Comments!
Show More

Related Articles

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker