The government has said it is preparing a new and comprehensive bill which seeks to repeal the current Pension Act in an effort to sanitise Malawi’s pension regime and address concerns that stakeholders have faced over time.
Minister of Finance Sosten Gwengwe confirmed of the development in a telephone interview after Member of Parliament (MP) for Likoma Islands Constituency Ashems Songwe hinted on the matter in the august House on Thursday.
Gwengwe said the government has advanced in drafting the bill and that it will be tabled during the next sitting of Parliament.
“It is true we will be tabling that bill so that we repeal the current Pensions Act. All consultations have been done, we are at advanced stage of its preparation,” Gwengwe said.
Speaking in Parliament last Thursday Songwe moved a motion which the house passed, deferring debate on the Pension (Amendment) Bill which he had tabled on November 11, 2021.
Songwe said the decision to defer the debate was due to new developments on the matter including government’s decision to delete the current law.
He also disclosed that after thorough consultations with stakeholders he discovered a number of outstanding issues that needed resolving before any amendment to the law.
“From the consultations other pertinent issues that need to be addressed have emerged, issues that I had not envisioned at the time I tabled this Bill. These are issues that are affecting employees and pensioners,” Songwe said.
Some of the issues that emerged he said included penalties exerted on employers who do not remit pension funds to the fund managers, adjustment of threshold for 100 percent collection from K500,000 to K5 million and calls for a pensioners to get the whole amount for annuities that are below minimum wage.
“The Minister of Finance has confided in me that he is preparing a comprehensive new Pension Bill that seeks to repeal the current Pension Act that my Bill seeks to amend. I am keeping a watchful eye on that process,” he added.
Meanwhile, Executive Director for the Employers Consultative Association of Malawi George Khaki has said government has been slow on changing the country’s pension regime, adding the changes are necessary now due to what he called the ongoing economic turbulence.
The Pension amendment bill which the legislature tabled in 2021 sought to allow a worker to access their pension three months or six months before retirement.
At the time Songwe also proposed an increase in the lump sum payout by the pension administrator upon retirement from 40 percent to 70 percent.