Movement believes Pension Act technically antagonistic to job creation for youths
Pension Act Amendment Movement is asking Parliament when it convenes next month to amend the Pension Act of 2010, which it finds to be technically antagonistic to the idea of creating more jobs for the youth since older employees cling on to their jobs in order to clock mandatory retirement age of 60 years.
The movement says Pension Act of 2010 is important in a number of ways, however, it strongly needs amendment so that it meets all its intended objectives.
“As it currently stands, we believe objective number four of the Act, which talks of fostering agglomeration of national savings in support of economic growth and national development is not being achieved in a satisfying way,” says the petition that will be sent to Parliament for consideration.
“Section 64 (conditions for payment of benefits in respect of pension funds), stipulates conditions that need to be satisfied for one to access their funds and one of the conditions is that one has to reach the retirement age [section 64, subsection 1 (a)]; defined as 50 to 70 years (section 3: Interpretations) which is currently at 60 years.
“Taking into account the provision cited above, our observation is that the Pension Act is technically antagonistic to the idea of creating more jobs for the youth.
“With employees clinging to their jobs in order to clock 60 years so that they retire and access their benefits won’t help in creating jobs.
“Again, with the little that one gets as provided by the Act, not many would take up a challenge of quitting their job and venture into business since what they get after quitting may not be enough capital for them.”
The movement further says at it currently stands, there are many of employees that are willing to retire as early as possible to utilize their pension as life-after employment capital accumulated in pension contributions but are unwilling to do so because the Act weighs heavy on them.
“As stipulated by the Act, we are allowed to have our pension benefits after we serve for 20 years (in civil service); prove to have stayed for six months without a job (in private sector and just to access only 40%); and get to 60 years of stipulated retirement age (for an employee to get 60% or all of the funds).
“The petition, therefore, is appealing to the Honourable Members of the National Assembly to pay the much needed attention to the key issues by deliberating upon them when Parliament convenes this September for budget session.
“We therefore propose that the Act should be amended back to the provisions that it had on conditions for payment of benefits in respect of pension funds before 2011 where employees could quit their jobs and get their pension benefits.
“This proposed amendment would in turn be creating job opportunities where people will be free to quit. It will also trigger a boom in entrepreneurship since quitting employees will have capital to invest on their own thereby creating further jobs in their respective entrepreneurial ventures.
“This will consequently foster economic growth and national development that would start at individual level,” says the movement.
Quoting Section 65 of the Act that stipulates conditions that one can access pension funds in terms of Early Payment of Funds, one of which is to produce proof to have stayed for six months without a job in order to access pension benefits [Section 65 subsection 1 (a)] but unfortunately, such accessible benefits are only limited to contributions made by the member which at most amount at 40%.
“Our view on this is that many people suffer a lot during the said period of [six months] unemployment so much that when the time comes to access the provided benefits in question, there are so much debts to be sorted out.
“Consequently, a pensioner is left with insufficient funds to invest into a reliable entrepreneurial venture.
“We therefore propose an amendment to this provision (section 65 subsection 1) so that the Act should let one access the funds as soon as the calculations are done by the insurance companies that is within four weeks, at most.”
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Foseki
At the moment retiring age is 60yrs but some church organisations have their own policy to retire at 60yrs or even go up to 68yrs should you wish.
Could the government look into this because the church wants to be involved in the issues of the country.
Why should they make their own policy knowing life span is short in Malawi
Retirement age range is 50-70 years… Companies choose from there… Get the facts straight
i totally agree with this movement sentiments. To start with the current Act is very prohibiitive and punitive and has not helped the economy save for pension fund managers and banks to be precise. I brought up this idea at a certain forum dominated by bankers but the way i was ‘crushed’ eish. They hated the idea to the core. We really need to overhaul this act and better still revert to how things were in the before 31 May 2011. what is there to show as a national in terms of developments emanating from pension funds?.
Now you are talking. The money should be let back into the economy by giving and empowering the employees to manage their own funds. Those Pension Managers cannot show you what they are doing with people’s money.