Employers across Malawi could face penalties of up to K100 million if they fail to comply with mandatory occupational pension requirements.
The Reserve Bank of Malawi (RBM) has warned employers across the country to comply with the mandatory occupational pension scheme or face penalties of up to K100 million.
The warning has been issued by the Registrar of Financial Institutions, who is also the Governor of the Reserve Bank of Malawi, in a notice to all employers in Malawi.
The Registrar says employers covered by the Pension Act, 2023, are required to enrol their employees in the mandatory occupational pension scheme, unless the employees fall under categories specifically exempted by law.
The notice further reminds employers that pension contributions must be remitted to a pension fund within 14 days after the end of the month in which the contributions become due.
Under the Act, an employee must contribute a minimum of five percent of their pensionable emoluments, while the employer is required to contribute at least 10 percent.
Employers who fail to remit the contributions within the stipulated period will be charged a penalty calculated at the RBM policy rate plus 10 percent per annum for every month the contributions remain unpaid.
The Registrar has also reminded employers that they are required to maintain a life insurance policy for every employee, with minimum cover equivalent to the employee’s annual pensionable emoluments.
