Ex-Admarc workers fail to access pension benefits

Former Admarc employees are unable to access their pension benefits, nearly a year after being laid off amid revelations that the parastatal failed to remit millions of their monthly contributions prior to its restructuring.

The former workers’ union president John Hassan confirmed in an interview on Tuesday, saying as a result, the majority of the former workers are sliding into destitution.

He said the workers penned Admarc, asking for a meeting to present their grievances but they have not received any response.

He said: “We have gathered that Admarc skipped remittance of the monthly contributions to Old Mutual for a couple of months. This is why we have not been allowed to get our pension funds.

“However, we are informed that Admarc has managed to clear part of the arrears. However, it remains with the month of January amounting to K300 million. This is why we wanted to meet them so that we get assurances it will be paid soon.”

Hassan accused Admarc of acting contrary to the provisions of the Pension of 2022 which provides that workers that have lost their jobs access their pension funds after three months of not getting new jobs.

“We feel that Admarc has not respected the law. And, this is unfortunate for a government institution which is supposed to lead by example,” he said.

Section 88 of the Act, which President Lazarus Chakwera assented to on February 8, 2023, reads on early payment of pension benefits: “the trustee may pay benefits to the member out of the fund if the member—(a) Has not secured another employment for a period of at least three months before the date of the application.”

Subsection (2) subject specifies that “benefits paid to a member under this Section shall be limited to that part of the contributions paid by the Member, at the employer, and any investment income on the Member’s contributions”.

Meanwhile, the ex-workers union president has also disclosed that Admarc has not paid the workers repatriation allowance which would help the former employees to relocate.

“What is happening is that Admarc wants the former employees to vacate the company houses when they have not paid them repatriation benefits and they are also unable to access the pension funds,” he said.

Admarc spokesperson spokesperson Agnes Chikoko Ndovi had not responded to our questionnaire as we went to press.

However, the Human Rights Consultative Committee has described the Admarc handling of the ex-workers as unlawful.

Its chairperson Robert Mkwezalamba, who is also a labour relations expert, said: “The matter of repatriation was supposed to be part of the retrenchment package.

“For now, the workers would be justified to seek a court injunction to restrain Admarc from removing them and ensure that the due process of the law is completed.”

Mkwezalamba also asked the Reserve Bank of Malawi, which regulates pensions, to intervene in the Admarc matter.

“We would like to ask the Reserve Bank of Malawi to intervene. We would like to ask the workers to lodge a complaint to the RBM which should issue an order to Admarc and Malawi Government to ensure that the pension benefits are paid unconditionally,” he said.

The Pension Act compels the employers to remit the pension contributions “no later than 14 days after the end of the month in which the deduction should have been made.”

Section 10 of the legislation stipulates a fine of K100 million for those that violate these provisions.

Meanwhile, a corporate governance expert Richard Tchereko said by not remitting pension contributions “employees were deprived of return on investment of their pension premiums. Furthermore, it is a violation of the Pension Act 2023.”

Tchereko, however, said that repatriation allowance is not “necessarily mandatory and cannot be used by ex-employees to cling to institutional houses unless it was part of conditions of service.”