Employers in the country have been encouraged to comply with the just amended pension act so as to escape the K150 million penalty for employers who default remittance of pension contributions.
This is according to Employers Consultative Association of Malawi (ECAM) Executive Council Member, Roben Kajasiche, who was speaking on Thursday during the Pension Act (2023) Awareness Workshop which was held at Crossroads Hotel in Blantyre.
Kajasiche said the association organised the workshop to enlighten Malawian employers about some of the provisions of the Pension Act (2023) which will be implemented from 1st April, 2023.
He then implored employers in the country to adhere to the provisions in the amended pension act, saying that is the only way to escape the penalties which have been put in place by the new law.
“This workshop aims to equip employers who are the trustees from various offices to do what is required by the legislation. We had the Pension Act 2010, so, we are enlightening each other what is in the new pension act which start on 1st, so that no one should lag behind.
“This is a legislation, companies and organisations that are employers, whether we like it or not, we have to make what the legal provisions are saying. If they have challenges, they have to take it up with the authority thus the Reserve Bank of Malawi. If they just choose to default, penalties will be meted out on them,” said Kajasiche.
Kajasiche further said he is impressed with the amended provisions in the Pension Act (2023) saying they are providing financial security to the dependents, and added that the penalties will encourage employers to always comply.
In a separate interview, Reserve Bank of Malawi Principal Examiner responsible for Pension Regulations Shamiso Malekano Tsonga, commended ECAM for organising the workshop which she said has helped the central bank to reach out to the public on the amended act.
“These engagements are critical because it is also helping us to sensitise employers on new provisions that have been incorporated in the Pension Act (2023). With the penalty put on as higher as K150 million, we expect enhanced compliance with the pension legislation,” said Tsonga.
She further revealed that the pension fund assets have increased to K1.7 trillion and attributed the improvement to an increase in membership and also an increase in contributions which are based on pensionable emoluments.
Some of the amended provisions in the Pension Act (2023) include an option for an employee to belonging to both the mandatory scheme and the voluntary scheme or just the mandatory scheme and the retirement age will from 1st April be determined by condition of service as opposed to the previous fixed retirement age.
Waiting period for access of part of pension for someone that has lost a job has been reduced from 6 months to 3 months and the person will be able to access 100 percent of what they contributed.
The new law also stipulates that those retired will be able to access 50 percent of the total contributions including interests accumulated at once and an employee will also be allowed to access 50 percent of total contributions five years prior to retirement which is expected to help people prepare for retirement.
Follow us on Twitter:
