The Reserve Bank of Malawi (RBM) has said strong collaboration with the Ministry of Labour, Skills and Innovation can help to enhance inspection and monitoring of the Pension Act to guarantee industry compliance.
RBM Deputy Governor for economic planning and regulations Henry Mathanga said this yesterday in Lilongwe during a meeting with the ministry’s officials following the signing of a memorandum of understanding to collaborate on issues of pension compliance.
The meeting was held on the back of rising pension arrears which hit K144.5 billion in December 2025 from K27.5 billion in 2021. Out of the total arrears, K90.4 billion is in unpaid pension contribution from Public Service Pension Trust Fund and K11.5 billion not credited to members.
In his remarks, Mathanga said the ministry needs to be a key partner considering its wide presence in all regions and districts to ensure easy inspections and monitoring of employers’ compliance nationwide.
“The Ministry of Labour is critical and has responsibility to employers and employees. In terms of outreach, district labour officers are everywhere in all districts,” he said.
Mathanga said the Registrar of Financial Institutions is limited in terms of outreach, as such, working with the ministry is key as it can easily reach out to all areas.
On compliance rate, Mathanga said since the registrar started collaborating with the Ministry of Labour last year, there are signs of improvement, especially on the part of employees.
Ministry of Labour, Skills and Innovation director of administration George Masinga said the ministry will use its expertise in labour issues to ensure compliance to the Pension Act and that workers’ rights are respected.
“Our common goal is to ensure that when workers retire after working for 20 or 30 years, they should retire with dignity with their pension funds,” he said.
Despite the RBM highlighting improvement in compliance since the start of its collaboration with the ministry, records indicate continued piling of pension arrears, with the figure recorded at K144.5 billion in December 2025 from K27.5 billion in 2021, according to RBM Financial Stability Report for December 2025.
At K144.5 billion, the arrears represent 41 percent of the K352 billion contribution for 2025 and two percent of the total pension assets at K8.4 trillion, according to the RBM.
In an interview yesterday, Malawi Congress of Trade Unions representative Bernard Kumwenda said the arrears affect the pension package of workers and risk losing out on their savings when they retire or lose their jobs.
“We have a lot of policies on pensions, but one wonders why the same is not being implemented. By not remitting the pensions, employers are committing a criminal offence because they deduct the funds from employees, but fail to remit to pension fund administrators,” he said.
Employers Consultative Association of Malawi executive director George Khaki said the piling of arrears is a reflection of the economic environment where businesses are not generating enough revenues to meet their obligations.
But he said the Pension Act must be respected and employers are obliged to remit pension deductions every month.
