• Mon. May 29th, 2023

RBM asks employers to save pension for their employees

By Blessings Kaunda

Reserve Bank of Malawi (RBM) has urged employers to putting all their employees on pension scheme as required by the law.

Speaking Thursday, RBM Chief Examiner, Paul Nyirenda said this during pension awareness week held in Mzuzu.

“Remittance of pension contribution has been a challenge for some time. The law says pension contribution must be permitted within 14 days of or after the end of the month. But what we have seen is that some employers have not remitted those contributions and arrears have been accumulating.

“When one retires he still needs some reliable source of income. It is only pension which provides that reliable source of income. That is why we would like to encourage people to save for retirement,” Nyirenda said. 

Nyirenda added that employer and employee contribute 10 and 5 percent respectively.

The Chief Examiner cited that some companies decide not to give pension to their employees before pension Act 2010. 

He said registrar of financial institutions engaged the employers to urge them to meet the contribution but others did not comply.

“NBM then came up with the list of noncompliant employers and published them in newspapers. After the publication some complied while others still had challenges to comply. 

“In June this year the Registrar actually visited a number of noncompliant employers after visiting them we gave them an administrative penalty in line with the law so the penalty basically gave them the direction that noncompliant employers should comply within 21 days. As we talking now some have complied,” he added.

According to Nyirenda the Registrar has taken a further step to take these employers to court and they are in the process of initiating the court proceedings which are underway. 

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