Almost 20 institutions ‘named and shamed’ by Reserve Bank of Malawi for pension defaulting
Reserve Bank of Malawi (RBM) has named and shamed about 18 statutory corporations and councils have not been remitting their employees’ pension contributions as mandated by Pensions Act 2011 amounting to a cumulative K5.6 billion for close to six years now.
Governor for the central bank Dalitso Kabambe, said in a statement made available to Nyasa Times, it is an offence not to remit pension contribution, citing Section 65 of Pensions Act (2011) which mandates the Registrar of Financial Institutions to take to court and punish every institution that fails to comply with the Act.
Chief defaulter according to the list is Agriculture Development and Marketing Corporation (Admarc) whose arrears are pegged at K1.3 billion, Lilongwe University of Agriculture and Natural Resources (Luanar) at K958.1 million, Malawi Broadcasting Corporation at K854.5 million, while Blantyre Water Board (BWB) funds for one and a half years have accumulated to K717.6 million.
Blantyre City Council accumulating the highest among councils at K242.7 million for a period of three and half years.
Mzuzu City Council and Nkhata Bay District Council have arrears at K48 million and K10.8 million respectively for non-remittance of six years.
While Mangochi Town Council has K26.3 million in arrears for four years and Lilongwe City Council has K25.7 million for two years.
Other companies appearing on the list include Southern Region Water Board, Mzuzu University, Malawi Local Government Association, Malawi Post Corporation, Central Region Water Board, Copyright Society of Malawi and Malawi Institute of Management.
Kabambe said RBM is concerned about the non-remittance of pension contributions and will, therefore, consider further actions to enforce compliance if the statutory bodies do not clear the pension contribution arrears by March 2019.
“Section 61 of the Pension Act requires employers to remit to a trustee of a pension fund both employer and employee pension contributions within 14 days from the end of the month the contributions fall due.
“Employers are, therefore, once again reminded that non-remittance of pension contributions to a pension fund is an offence under the Pension Act,” reads the statement.
In July 2011, Malawi adopted the Pensions Act of 2010 which introduced a mandatory contributory pension scheme to build national savings.
Among others, employees are expected to contribute a minimum rate of five percent while employers chip in 10 percent of the employee’s monthly gross salary.
Meanwhile, unionists say any worker who has been cheated by the defaulting institutions deserves compensation.
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So for six years these quasi organizations have been violating the Pension Act with impunity. The pension act metes out penalties on non compliance. The reserve bank, the organization that is mandated to enforce this law does nothing more than a pep talk. No wonder we are a lawless country. Think about this, had these organizations been in the private sector, how quick the Reserve Bank would have been to pounce on them. Employees who are supposed to enjoy the growth of their pensions are being denied such. Sickening!!!!!