More Rot in Pensions Fund: RBM Report Exposes K11.5 Billion Uncredited, 1,144 Missing Members, K4.9 Billion Unsupervised Disbursements, and Amaryllis K128.75 Billion Deal in Deepening Pension Crisis
What is emerging from a confidential 33-page interim report by the Registrar of Financial Institutions and Reserve Bank of Malawi (RBM) Governor is a full-scale governance collapse at the Public Service Pension Trust Fund (PSPTF)—a K1.1 trillion institution managing retirement savings for about 139,000 civil servants, yet reportedly plagued by missing members, uncredited billions, unaudited accounts since 2021, and controversial multi-billion-kwacha investments including the K128.75 billion Amaryllis Hotel purchase in Blantyre.
The report, conducted between July 21 and August 1, 2025, and prepared under Section 41 of the Financial Services Act, 2010, exposes what regulators describe as “deep systemic weaknesses in the handling of members’ retirement funds,” raising alarm over the safety of deferred earnings meant to support public servants in retirement.
One of the most alarming findings is a breakdown in member records. The report states that 1,144 eligible members are completely missing from PSPTF schedules, while six members are duplicated—an error margin that directly undermines the integrity of the entire pension database.
Even more damaging is the issue of uncredited contributions. According to the report, approximately K11.5 billion in pension contributions between 2023 and August 2025 were never updated in individual member accounts. This is a direct violation of Section 13(1) of the Pensions Act, which requires employers to remit contributions within 14 days after month-end.
The implication is severe: thousands of civil servants currently cannot accurately verify the true value of their retirement savings.
The governance failure deepens further. Investigators found that PSPTF operated for nine months without a Board of Trustees, leaving management effectively in control of key financial decisions. During this period, the fund allegedly disbursed about K4.9 billion without full board oversight, raising serious accountability concerns.
The report also confirms that PSPTF has not produced audited financial statements since 2021, meaning several years of financial operations remain unverified. It further notes that the fund failed to meet a January 31, 2026 submission deadline for financial reporting, triggering additional regulatory concern.
Compounding these failures, investigators discovered that sensitive member records were being managed using unverified manual spreadsheets, a practice the report suggests exposes the system to errors, manipulation, and loss of data integrity.
On investments, the report highlights the already controversial K128.75 billion acquisition of Amaryllis Hotel in Blantyre, a deal that has triggered public outrage and parliamentary scrutiny due to alleged overpricing and questionable approval processes.
The Amaryllis purchase is now seen alongside a broader pattern of risky investment concentration in the hospitality sector. The report reveals that 37.2 percent of PSPTF’s portfolio is tied up in hotels, including Lifestyle Boutique Hotel, Oasis Hotel, the ex-Royal Hotel, and Amaryllis Hotel—raising concerns of dangerous lack of diversification in violation of pension investment principles.
Further losses include the purchase of land in Lilongwe for K1.4 billion, later independently valued at K937 million, resulting in a K463 million loss. Auditors blamed this on the board’s failure to obtain an independent valuation before concluding the transaction.
The fund also wrote off K169 million on an unusable software system that was intended to improve operations, but failed due to lack of a formal project management policy.
In addition, the government is reported to owe PSPTF K90.4 billion in unpaid contributions as of June 2025, further weakening liquidity and denying members investment growth.
The report also exposes weak governance culture, noting that steering committees frequently failed to keep minutes during meetings with contractors—effectively destroying audit trails and making accountability difficult.
In response to the findings, the Reserve Bank of Malawi has ordered a full operational cleanup and tightened oversight, including halting suspicious payments and warning of a possible K100 million penalty for non-compliance.
PSPTF public relations officer Yamikani Sekeni acknowledged the concerns, stating: “The fund is actively addressing critical governance and financial concerns flagged by the Registrar of Financial Institutions.”
He added that multiple audits are currently underway: “External audits are being conducted by Baker Tilly for the 2022 to 2024 period, while forensic audits by Audit Consult will cover October 2024 to September 2025, when the fund operated without a board. Internal reviews have also been commissioned by the Ministry of Finance.”
Sekeni further said: “Once the June 30 audit processes conclude, comprehensive statements will be released to the media and the public, ensuring full transparency.”
Scotland-based economist Velli Nyirongo warned that the findings expose deep institutional risks. He said pension systems depend on strict transparency and control mechanisms, cautioning that the current situation leaves members exposed to disputes, losses, and uncertainty over their retirement benefits.
What is now clear is that PSPTF is not facing isolated administrative issues—but a systemic breakdown affecting governance, accountability, investment discipline, and the integrity of Malawi’s public pension system.
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