“The issue of non-remittance of pension is very challenging,” my Kenyan friend Fidel confessed this week after reports emerged that employers in the country owe pension fund managers over K4.7 billion.
Fidel works in the pension industry and he knows the problem well.
“I must confess especially for employers who have not been remitting as at when due, although there are provisions in the law on how to handle such. One of these is that, when you have an employer who has not been remitting regularly, we are supposed to get the regulator informed about it.
“But before we do that, we try to find out what is responsible for such because the implication of making an official report, is that it could lead to one or two things for your customers,” he explained.
Fidel says most pension managers fear that an official complaint to authorities could lead to the organisation being sealed up. “People could lose their jobs. Do you want that to happen to your fellow Malawians?” he quizzed.
I now understand that what most pension fund managers do in the first instance is to find out if employers are deducting and not remitting or they are not deducting at all? So they babysit the employer if he is going through a bad phase in terms of having economic challenge, to see how they can sort out the mess and start remitting again.
After an hour of discussing the issue, I informed Fidel what needs to be done to get employers attention so that they can start paying on time again: naming and shaming.
I think it’s high time that the pension fund regulator, the Reserve Bank of Malawi (RBM) came in the open with a list of employers who are failing to remit pension funds. The suggestion sounds too simplistic but it is one sure way that employees will be alerted that their employer has been playing with their retirement savings.
In case you do not know, a pension scheme is important to any employed, salaried worker as it replaces earned income when an employee retires.
The government through the Pensions Act of 2011, made pension mandatory. Under this act, all formal employers are mandated to enroll their employees on a pension arrangement.
Currently, employees contribute a minimum rate of 5 percent while employers 10 percent of the employee’s monthly gross salary to the scheme. The employer is responsible to ensure that the contributions are remitted on time towards the pension fund.
When the money is remitted on time, an investment manager invests the pension funds immediately in stocks on the Malawi Stock Exchange, government securities, corporate bonds, real estate and mutual funds.
This is done to ensure that scheme members’ funds grow as investment returns are credited to their accounts at the end of the financial year. So if employers are not paying the contributions on time, scheme members are denied their entitlement to bonuses. The money does not grow and when one retires, he discovers that there is little for him to survive on.
Word on the street is that, while pension managers do not want to lose businesses, they should stop babysitting non-remitters by submitting reports to RBM who instead of closing the firms, can publish a list on defaulters. Is that too much to ask?
Arrest Lucifer please
We on the streets are livid with police and women’s rights organisations inaction over confessions made by a man called Lucifer on State broadcaster recently.
The man confessed in a televised programme on Malawi Broadcasting Corporation (MBC Tv) that he was part of gang in the Malawi Young Pioneers (MYP) who perpetrated abuses including molesting women.
The ex-MYP official said he had come on air to confess his ‘atrocities and beg Malawians for forgiveness’.
We on the streets do not remember anywhere else in the world where crimes such as rape and molesting women go unpunished.
Take Eric Aniva’s case for example. The self-confessed Nsanje sexual cleanser is languishing in jail for confessing to the British Broadcasting Corporation (BBC) that he cleansed over 100 women in his career as a ‘fisi’. While Mwiza Chavura who released a song Ndidzakugwilira was recently arrested for the song.
If Aniva was jailed and Chavura was arrested, why is Lucifer still scot-free, two weeks after making the shocking confessions on air? Is Lucifer untouchable?
Word on the street is that Lucifer should be arrested too for the crimes he confessed to have committed against women.