While the Public Service Pension Trust Fund (PSPTF) remains in the limelight following the K128 billion Amaryllis Hotel controversial purchase expose, another report has painted a disturbing picture of one of the country’s biggest pension funds.
PSPTF is under intense scrutiny as a confidential regulatory report has exposed a chaotic management system, weak oversight , and billions of kwacha in misplaced civil servant retirement savings.
The Amaryllis Hotel scandal involves the highly controversial and allegedly overpriced purchase of the luxury hotel in Blantyre by the Public Service Pension Trust Fund (PSPTF). The transaction sparked widespread public outrage and intense parliamentary investigations due to massive financial discrepancies and suspected high-level political corruption.
Report’s key highlights:
- Regulatory mandate: The examination was authorised under Section 41 of the Financial Services Act, 2010, empowering the Registrar to oversee and supervise the financial services industry.
- Comprehensive vetting: The probe serves as a deep-dive audit to ensure absolute adherence to both the Financial Services Act, 2010 and the Pensions Act, 2023, alongside internal fund policies, trust deeds, and directives.
- Actionable over sight: Furnished exclusively for the Board of Trustees, the document is a critical tool designed to guide PSPTF leadership in rectifying structural or financial anomalies and ensuring total governance compliance.
The findings reveal severe administrative and compliance failures threatening the pensions of thousands of public workers.
A confidential 33-page interim examination report—produced by the Registrar of Financial Institutions and Reserve Bank of Malawi (RBM) Governor—paints a disturbing picture of the fund.
Conducted between July 21 and August 1 2025, the sweeping assessment exposed shocking systemic weaknesses in how members’ retirement funds are handled.
Among the most glaring red flags are deep discrepancies in member data. The examination found 1 144 eligible members completely missing from the schedule, alongside six duplicate entries.
Even more alarming is the status of members’ contributions. The report reveals that roughly K11.5 billion in pension contributions from 2023 to August 2025 was never updated in indiv idual member accounts. This directly violates Section 13(1) of the Pension Act, which requires employers to remit contributions within 14 days after the end of the month.
These severe remittance delays and missing updates mean thousands of civil servants are currently in the dark, unable to determine the true, accurate value of their retirement nest eggs.
This chaotic record-keeping, combined with controversial, multi-billion-kwacha investment decisions like the K128.75 billion Amaryllis Hotel purchase, has triggered urgent calls for a massive overhaul of the fund’s governance.
The report raises serious alarms over the safety of deferred earnings meant to support public servants in their golden years.
Wi t h over s ight s evere l y compromised, authorities are now racing to secure the fund’s stability and ensure the institutional accountabi lity demanded by contributors.
The explosive regulatory report reveals the fund operated without audited accounts since 2021, leaving the retirement savings of 139 000 civil servants in jeopardy.
The K1.1 trillion fund, says the report, ignored a January 31 2026 submission deadline, raising massive accountability concerns.
Inv e s t igator s uncov e red a compl e te b rea kdown i n institutional governance. The fund inexplicably operated for nine months without a board of trustees, allowing management to unilaterally disburse K4.9 billion, according to the report.
Compounding these concerns, sensitive records were managed on unverified, manual spreadsheets.
To protect contributors, the Reser ve Bank of Malawi has mandated a rigorous cleanup of all operations, demanding full transparency on all transactions.
The damning repor t ha s prompted the regi s t rar to halt suspicious payments and threatened a K100 million penalty for non-compliance.
The report details a trail of fiscal mismanagement that is bleeding civil servants’ retirement savings:
lUnpaid dues: By June 2025, the government owed the fund K90.4 billion in outstanding contr ibutions. This massive shortfall denies workers vital investment growth while exposing the fund to severe, long-term financial pressure.
l Ne g l i g e n t p r o p e r t y acquisitions: The fund suffered a painful K463 million loss after purchasing Lilongwe land for K1.4 billion, despite an independent valuation later pegging it at just K937 million. Auditors blamed the board’s failure to seek an independent assessment before finalising the deal.
lConcentration risks: Trustees heavily favoured the hospitality sector, pouring members’ money into the Lifestyle Boutique Hotel, ex-Royal Hotel, Oasis Hotel, and Amar yl l is Hotel. These alternative investments account for 37.2 percent of the portfolio, dangerously concentrating risk and violating diversification principles.
lMissing audit trails: Systemic record-keeping failures plague major projects, with steering committees frequently failing to keep minutes during meetings with contractors. Examiners warn this absence of documentation destroys critical audit trails.
lWasted tech budgets: Lacking a formal project management policy, the fund also wrote off K169 million on an unusable software system meant to enhance operations.
PSPTF public relations officer Yamikani Sekeni said PSPTF is actively addressing critical governance and financial concerns flagged by the Registrar of Financial Institutions.
He said multiple audits are currently underway and wi l l be made public by June 30, though formal submission of the secretariat’s progress report is pending the appointment of a new Board of Trustees.
The fund is tackling governance, financial oversight, and member data administration through comprehensive reviews. Key initiatives include:
lExternal audits: Conducted by Baker Tilly for the 2022 to 2024 period.
lForensic audits: Handled by Audit Consult to cover the period from October 2024 to September 2025 when the fund operated without a board.
l I n t e r n a l r e v i ew s : Commissioned by the Ministry of Finance to evaluate internal risk management systems.
Once the June 30 audit processes c o n c l u d e, compre h ens i v e statements will be released to the media and the public, ensuring full transparency
Scotland-based economist Velli Nyirongo warned that report findings on the fund reveal deep governance and accountability failures. He stressed that the lack of audits and missing records threaten institutional credibility and the safety of members’ retirement savings.
He emphasised that pension funds are built on transparency and strict financial controls to protect retirees. Because of these systemic issues, Nyirongo warned that the institution is increasingly exposed to disputes, financial losses, and severe reputational damage, while leaving members uncertain about the accuracy of their funds.
