Malawians’ pension money corruptly awarded to  Kenyan company, HRDC exposes 

As they continue with their whistleblowing campaign, Human Rights Defenders Coalition (HRDC) has exposed that administrator of Malawians’ pension money is a Kenyan company—something the organization suspects corruption in how they were awarded.

Trapence: We urge the Anti-Corruption Bureau to suspend the award of the contract and carry out urgent investigations

HRDC has since written the Anti-Corruption Bureau (ACB) to investigate the Public Service Pension Trust Fund (PSPTF)—which runs Malawians’ pension money—appointed Zamara Pension Administrators Limited as its administrators.

Zamara Pension Administrators Limited is a Kenyan company with no foothold in Malawi and could not have been given business of this nature.

A letter signed by HRDC Chairperson Gift Trapence and National Coordinator Luke Tembo—endorsed by the rights body’s regional leaders—to ACB Director- General Reyneck Matemba, notes that:

“We find the award of such a serious contract that affects livelihoods of senior citizens to a company with no foothold in the country questionable. We urge the Anti-Corruption Bureau to suspend the award of the contract and carry out urgent investigations,” reads the letter.

The letter also says HRDC has information that local companies such as Old Mutual, National Bank and Nico Life also applied to be administrators of the scheme, pegged at K556.8 million, which is 0.4 percent of the public wage bill but were overtaken by the ‘foreign’ firm.

“It is alleged that National Bank and Nico were eliminated after evaluation of the technical proposals. It is also alleged that Zamara flew the pension fund trustees to Kenya for an unknown meeting,” reads the letter.

Trapence told Malawi media on Thursday that HRDC has written ACB on the matter and that they expect the graft-busting institutions to act on the tip-off.

“We want the ACB to investigate circumstances surrounding the award of this serious deal which affects livelihoods of our senior citizens. It is important that the funds are managed by a company with traceable roots and not some company whose only aim is to make profits from our seniors citizens’ money,” he said.

In a shocking notice published in the local press on Wednesday, the PSPTF states that it has finalised the evaluation process and intends to award the K556.8 million contract to Zamara Pension Administrators Limited of P.O. Box 2766, Blantyre.

Meanwhile, a tax expert has warned that while Value Added Tax (VAT) on pension administration fees may not be applied on pension savings, it may be passed on to the populous from pension managers through charges.

A leaked communiqué between a pension administrator and its client indicates that VAT will start being effected on pension administration fees from September 1, 2020.

“We would like to advise you that the industry has received communication from Malawi Revenue Authority (MRA) that VAT will be levied on pension administration fees effective September 1, 2020.

“This means that going forward, on the current administration fees paid by your organization, you should add VAT at the value of 16.5 percent of fees payable,” reads the letter in part.

Ministry of Finance spokesperson, Williams Banda, said that the VAT will only apply on earnings that fund managers make from their services.

“Pension administrators charge an administration fee for managing pension schemes; the fee attracts VAT like any other fee charged on taxable services.

“The general public should note that according to the VAT Act, pension contributions do not attract VAT while fees for administering pensions do attract VAT,” Banda said.

But tax expert Emmanuel Kaluluma, wondered why such tax could not be exempted as is the case with the banking and insurance sectors.

“It means that down the line when they pay that money as VAT, they will push it to the members of the pension fund. However, we are asking why VAT now when the pension fund has been there all along? Of course it is because of the restructuring going on.

“In the VAT Act, banking and insurance services are exempted from VAT; now why not take that exemption to the pension fund managers because insurance companies were doing the same work but were not being charged VAT?” Kaluluma queried.

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Nyusesi
10 months ago

Foolish HRDC

Robert Mugabe
Robert Mugabe
10 months ago

Winawe sugwira ntchito m’boma nchifukwa ukunyoza HRDC. As a civil servant, I take this issue seriously and I can’t watch strangers tampering with my money. Let’s put politics aside and congratulate the Trapence gurus for revealing the truth to us.

nafundo zalo
nafundo zalo
10 months ago

dpp khalani pasi. tate wanu abkakupatsani ndalama zaulele akadabisala. alesi inu.
kuzolowera ndeu. kafuseni pitala ndalama zanu ndikaesa mukuenda mu miseu ngati yaku Germany adyablosi lazy bastards

Noxy
10 months ago

Hrdc inatha fasho

Chilima
Chilima
10 months ago

Trapense just shut up…we cadets are coming for you….not in bad way but you will shocked DPP is coming back with full force chindere iwe. UNATINAMIZA ANTHU AKU PLMPOTO NDI ANZAKO

Mwanza border
Mwanza border
10 months ago

Must anti corruption bureau respond to each and every letter from hrdc? I don’t think so. Corruption fight should not be led by hrdc’s suspicions.

On the Vat, some of us knew that reducing tax on salaries of k100, 000 will force the tonse government to levy new taxes elsewhere. In the end no tax has been removed at all, just repackaged to fool the blind supporters.

Last edited 10 months ago by Mwanza border
Changalikandu Pwagu
Changalikandu Pwagu
10 months ago
Reply to  Mwanza border

Mwanza Border, you have said it well, my fool!

Chinamwali Boy
Chinamwali Boy
10 months ago
Reply to  Mwanza border

The tax in question is not for you but rather is for administrators of the pension. Your pension will be intact and the value added tax is policy was introduced by Bingu administration in 2010. It has nothing to do with Tonse alliance.

Mr Eat Big
Mr Eat Big
10 months ago

This matter will not go any further than complaints and pretence investigations by ACB.
Politicians have been eating big time and will continue to eat big time. Under APM, it was him, his wife and everyone near and far from them, including Indians, now its Chakwera, his son, his son-in-law and every family member, owner of Sunseeds and other Amwenyes and the Greek family. With SKC its his chosen friends, Amwenyes, the Greek family all are eating big. All corrupt.

Last edited 10 months ago by Mr Eat Big
ERUTU
ERUTU
10 months ago
Reply to  Mr Eat Big

Cadet bakha 🦆 phweeeeeeee mwauponda

Alfred Minjo
Alfred Minjo
10 months ago
Reply to  Mr Eat Big

Corruption is everywhere. Of late we are seeing drivers given security jobs and offered a P7 post. What is so different with the previous govt. Administration? Corruption at its best…

Marumbo
10 months ago
Reply to  Alfred Minjo

Please don’t compare this foolish mcp regime with the previous government. DPP was much much better than this gogo Chakwera’s regime. DPP was demonised due to ndale basi and nothing else. DPP is the type of government that Malawi need… atleast for the sake of good governance, progress and development.

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