Pension funds at K450bn
As Challenges continue to face implementation of the mandatory 2011 Pensions Act, the Reserve Bank of Malawi (RBM) has expressed satisfaction with the growth that has been registered since the new act was introduced six years ago.
RBM Deputy Governor, Grant Kabango, said, in that time, pension funds have grown from K59 billion to K450 billion as of June 2017.
Kabango further said the number of employees on pension has doubled from 102,505 to 259,743.
Kabango was speaking in Mangochi earlier this week when he made a keynote address at the Judicial Colloquium for stakeholders of the Industrial Relations Court. The meeting was organised by RBM to discuss challenges and gains, which the country has made since the act was enacted.
“But, some employers are still not complying with the act and most are blaming the situation on unfavourable economic environment.
“Enforcing compliance has been a big challenge. Some employers, when pushed hard, threaten to reduce the number of employees so that they can comply with the new requirements.
“This is the dilemma, which we need to deal with at the moment,” Kabango said.
He also expressed concern that some employers are not remitting pension contributions to fund managers. According to Kabango, pension arrears are now at K7.4 billion.
“We have taken an initiative that, soon, we will start naming and shaming employers that are not complying with the Pensions Act. We will also be engaging them to see how best we can motivate them to comply,” he said.
Deputy Chairperson at the Lilongwe Industrial Relations Court, Chimwemwe Kamowa, agreed with Kabango, saying non-remittance is making it difficult for those who have retired to access their funds.
“We are very concerned, especially for senior citizens that have worked for a long time and have retired. Instead of getting their money as required by law, they are forced to jump from one court to another to fight their former employers in court. It is high time we came up with stringent measures to impose on employers who are not complying with the law,” she said.
