Government defrauds pensioners

Government’s delay to pay gratuity to retirees subjects them to misery and short-changes them as their retirement packages lose value through devaluations and inflation.

The 44 percent devaluation of the kwacha announced a couple of days ago has further eaten into their already depleted yet-to-come gratuity. Since December 2020, the kwacha has been devalued by 120 percent.

Retirees Weekend Nation has spoken to lamented how their their lives have turned into a tale of torture because they cannot access their gratuity to support themselves through age-related challenges.

“I worked for the Ministry of Education for 33 uninterrupted years. I retired in October 2021 but until today, I am struggling to get my gratuity. I have visited Capital Hill countless times, to no avail,” grieved a retiree from Balaka District who opted for anonymity.

The former primary and secondary school teacher, who joined the civil service in June 1988, fears she may die before receiving her money.

She added: “I am now facing age-related challenges and my gratuity was supposed to be my sole means of survival. With the prevailing economic hardships, the monthly pension is meaningless.”

Another retired civil servant from Mulanje, who worked in the Ministry of Agriculture for 27 years and retired in April last year, said he had no idea when he would access his benefits.

“I was assured of receiving my package within three months of my retirement but a year has elapsed without anything. So, I relocated to the village because I could not continue living in town as life became unbearable.

“I will be clocking two years shortly without getting anything. It’s really pathetic… For me, even a modest gratuity can provide considerable assistance. But this retirement has now condemned me to eternal destitution,” he lamented.

These are just two hapless individuals out of several cases of retired government servants being illegitimately deprived of their entitlement after committing their lives to public service.

Public Service Pensioners Association of Malawi (Pusepa) president Genesis Malijani confirmed in an interview this week the plight and tribulations that civil servants retirees go through.

“We are aware of the challenges the new retirees are facing to receive their lump sum gratuity. We have written the authorities not once but several times and every time we get assurances things will improve.

“I wish government appreciated how depressing it is for a retired and aging person to wait for two or three years to access their benefits. Initially, people used to access their benefits even two or three months after retiring but now some retired workers are dying of stress and other curable diseases while on the waiting list for their benefits.”

Malijani, whose association has around 15 000 members, said the other complication of delayed payment of gratuity is loss of value for the money.

“If I am told that I will get K20 million today, the value of the money will not be the same after three years.”

Malijani, himself a retired civil servant after 23 years, hoped the situation would soon improve after government assured them during their last engagement four months ago.

On their part, the senior citizens point a finger at the Department of Human Resource Management and Development (DHRMD) for delaying necessary paperwork for the Accountant General’s (AG) office to process their benefits.

But DHRMD spokesperson Kennie Ntonga in a written response said they could not comment on the matter.

“The department only verifies details of the retiring officer as supplied by his or her MDA [ministry, department and agency]…DHRMD doesn’t handle any pension payments for retiring officers,” he said.

He further said the pensioners could not engage DHRMD on their payments because “it’s not our responsibility”.

Since 2017, government has been implementing two different pension schemes for public servants following the establishment of an independent financial institution Public Service Pension Trust Fund (PSPTF). The other scheme is known as Pay As You Go (PAYG).

PSPTF, established through Treasury as a financial institution and regulated by the Registrar of Financial Institutions, is a contributory pension fund for all public servants who were born on January 1 1982 and thereafter and all newly-recruited public servants from July 1 2019.

On the other hand, PAYG scheme is administered by the Accountant General’s office and is for all other public servants who are not within the age bracket that is administered by PSPTF (who were 36 years and above in 2017).

While calculations for the two schemes are similar, the major difference is that once a public servant under PSPTF retires the money is readily available in one’s pension account and is processed within 14 days unlike with the PAYG system where government has to find money to pay those retiring.

Accountant General Henry Mphasa did not respond to our inquiry through messages as well as his mobile phone during the past two weeks.

Government spokesperson Moses Kunkuyu, who is also Minister of Information and Digitalisation promised to comment on the matter, but had not done so until press time.

But sources from Treasury told Weekend Nation, the Accountant General’s office is currently paying gratuities to public servants who retired in early 2021.

They said Treasury has a backlog of over K40 billion pension arrears it owes around 3 000 retired civil servants.

Despite these challenges, between financial years 2020/2021, 2021/2022 and 2022/2023, Treasury allocated over K296 billion to pensions and gratuities for the retiring civil servants while this fiscal year, pensions and gratuities have a projection of K168 billion.

This comes at a time when the Ministry of Finance in 2022 also approved the construction of a K1 billion Pensioners’ Pavilion, a camping facility for the retired civil servants waiting for their benefits in Lilongwe.

In 2021, President Lazarus Chakwera accompanied by Vice-President Saulos Chilima stormed DHRMD offices at Capital Hill, the seat of government, demanding explanation on delays in paying civil servant salaries and other payments.

Former Civil Servants Trade Union (CSTU) president Eliah Kamphinda Banda, who also worked for the civil service for 32 years, described the lump sum as settlement money people use while establishing themselves in their respective homes.

“As such it ought to be paid immediately one retires because this is what government as an employer takes as statutory payment,” he said.

In 2016 government reduced the period it used to take for its new retirees to access their benefits from 18 months to one month following implementation of payment reforms after it adopted the first-retire-first-pay (FRFP) principle to clear the pension arrears.

But since 2018 government has not been able sustain the system which Treasury attributed to.