The Registrar of Financial Institutions, Reserve Bank of Malawi (RBM) Governor has approved Press Corporation Group Pension Fund to provide programmed withdrawal as an option on retirement in line with Section 67 of the Pension Act.
Press Corporation Group Pension Fund’s Principal Officer, Bidronce Chiphaso, in an interview yesterday said the development means PCL Group Pension Fund is currently the only licensed self-administered pension fund duly approved to provide the programmed withdrawal service.
He said that their programmed withdrawal option is a method by which retiring employees shall, in line with approved decumulation models, collect their retirement benefits in periodic sums spread throughout the length of their estimated life span.
“Time has come for willing retiring members to take control of their retirement funds and participate in decision making and management of their retirement funds. Eligible retiring employees will have the freedom of choosing between either annuities or our programmed withdrawal option as their preferred decumulation option on retirement.”
“Annuities are common on the market but there was a scarcity of approved providers for programmed withdrawal. This development will provide an alternative decumulation option for retiring members who do not prefer an annuity on retirement,” explained Chiphaso.
Chiphaso hopes that other licensed pension administrators would consider administration of programmed withdrawal and offer options to retiring members as is the spirit of section 67 (1)(a) of the Pension Act, 2010.
Reserve Bank of Malawi (RBM) pension and insurance regulation principal examiner Pachalo Luhanga said the country’s pension sector continues to face considerable compliance issues especially on non-placement of employees on pension and non-remittance of pension contributions.
RBM Governor is the registrar of financial institutions in the country.