K90bn paid, no ownership: Analysts demand pension fund reforms

Governance and financial analysts have warned that the Public Service Pension Trust Fund (PSPTF) must undergo sweeping institutional reforms after revelations that the fund paid K90 billion towards the controversial Amaryllis Hotel acquisition without securing legal ownership of the asset.

The analysts say the disclosure by statutory manager Stain Singo points to serious governance failures that extend beyond a single investment and expose systemic weaknesses in one of Malawi’s largest institutional investors.

Singo revealed this week that despite paying K90 billion, the pension fund has no title deed, no share certificate, no operational reports and no formal handover for the Blantyre-based hotel. The transaction is currently the subject of both a parliamentary inquiry and court proceedings.

Corporate governance expert Jimmy Lipunga said the development demonstrates why the fund’s governance architecture requires urgent restructuring.

“The board should cease to be a trophy and symbolic board merely acting as a conduit of vested interests,” Lipunga said.

According to Lipunga, trustees managing billions of kwacha belonging to public servants should possess the independence and professional expertise necessary to rigorously scrutinise major investment decisions before contributors’ money is committed.

He argued that the Amaryllis transaction illustrates what can happen when boards lack sufficient checks and balances to challenge management or demand complete documentation before approving investments.

Lipunga further recommended excluding politically exposed persons from serving as trustees and introducing fit-and-proper assessments, including integrity screening by the Anti-Corruption Bureau and relevant professional bodies.

Institute of Chartered Accountants in Malawi (ICAM) Chief Executive Officer Noel Zigowa shared similar concerns, saying the controversy highlights the importance of stronger professional oversight in managing pension assets.

He said representation by experienced chartered accountants would improve scrutiny of investment proposals, financial statements, internal controls and risk management for an institution entrusted with trillions of kwacha in pension savings.

“The Amaryllis transaction underscores the importance of rigorous due diligence, independent valuations, transparent decision-making and proper documentation before substantial amounts of contributors’ funds are committed,” Zigowa said.

While cautioning against prejudging the ongoing parliamentary inquiry and court cases, Zigowa said the absence of key ownership documents following such a substantial payment raises legitimate governance concerns that require institutional reforms.

Both experts, however, stressed that simply appointing professionals to the board would not be enough to restore confidence.

Instead, they called for a multidisciplinary board comprising experts in accounting, law, investments, actuarial science, pensions administration and risk management to strengthen oversight of complex investment decisions.

The analysts also expressed concern over audit backlogs dating back to 2021, which Singo said have delayed the declaration of approximately K250 billion in bonuses owed to pension contributors.

Zigowa described the delayed audits as “a serious governance and accountability concern,” warning that unaudited financial statements deprive contributors, trustees and regulators of reliable information needed to assess the fund’s financial health.

Beyond governance reforms, Singo has proposed establishing an Asset and Liability Committee, recruiting an independent Risk and Compliance Manager, reviewing agreements with external asset managers and reassessing historical investments to determine whether they continue serving contributors’ interests.

He has also disclosed that government owes the fund billions of kwacha in outstanding pension contributions, with reconciliation currently underway with the Treasury.

For both Lipunga and Zigowa, the proposed reforms present an opportunity to restore confidence in the Public Service Pension Trust Fund, but only if they are accompanied by greater transparency, independent oversight, timely financial reporting and stronger accountability mechanisms.

The analysts argue that the Amaryllis controversy should serve as a turning point for strengthening governance standards across Malawi’s public pension system and protecting the retirement savings of thousands of civil servants.

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