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Reserve Bank of Malawi gets tough on pension defaulters

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KAMBALAME—We will be looking at processes of prosecuting them

The Reserve Bank of Malawi (RBM) has warned that it will drag to court companies and institutions that are not remitting pension funds.

RBM Principal Examiner responsible for Pension Regulations, Peter Kambalame, said pension arrears amounted to K27 billion by September 2020 from K16 billion in September last year.

Speaking when Nico Pension engaged its clients on Thursday in Mzuzu, Kambalame said despite engaging employers to remit pension contributions, many seem to have failed this year due to the Covid-19 pandemic.

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“So the next step is that we will be visiting the employers and the next step will be prosecution. Reaching that stage, that is when we will be looking at processes of prosecuting them,” Kambalame said.

He then said it was sad that some companies had the money but deliberately defaulted their pension funds payment.

He suggested that there must be stiff penalties for such companies, arguing that this affects employees once they intend to access their pension funds.

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Nico Pension General Manager, Gerald Chima said, this year alone, the company had experienced a 20 percent drop in pension funds remittance.

He said that some who are complying, were not remitting in time, a development he said has a negative impact on the employees.

‘People need to know the importance of remitting contributions. This is people’s money, their own employees, and ,if not remitted in time, it ends up losing value,” Chima said.

He then asked the regulator to do more in encouraging employers to comply with pension contribution laws.

Last year, RBM named and shamed companies that had arrears in pension contributions as one way of pushing them to remit their contributions.

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