Treasury says it has again put on hold the K350 billion civil service compulsory pension scheme which was expected to take off in this new financial year because the government is too broke to implement such a scheme.
This is the third year running that the government has postponed the implementation of such a scheme since parliament passed the mandatory pension scheme for all workers in Malawi in 2011.
“The government cannot do it now. The government has no money to implement it,” said treasury spokesman Nations Msowoya.
He said when the government decides to implement the mandatory civil service pension scheme probably in the next financial year next year, it will do it in phases, starting with the newly recruited civil servants.
“We won’t roll it out wholesome because it will require a lot of money so we will do it in phases spread in a number of years,” he said.
Former president Bingu wa Mutharika forced the passing of the mandatory pension scheme after donors withdrew aid and he wanted his administration to set up pension funds where the government could be borrowing money to fund government operations.
His government was then borrowing money from commercial banks to fund government activities which was extremely expensive as bsnk interests were high.
If implemented, civil servants will have a once take home pension than the current arrsngemernt where civil servants are given some money and they withdraw another amount on every 14th of every month until they die.