The Employers Consultative Association of Malawi (ECAM) has said employers are failing to remit pension contributions to fund administrators due to the negative business environment which the country has experienced in the past five years.
According to ECAM, companies are not making enough money to pay pension contributions; hence they are forced to defauly payments.
As of last November, unpaid pension arrears peaked at K7.4 billion, according to the Reserve Bank of Malawi (RBM). The central bank is now engaging the employers to start remitting employees’ pensions.
One of the pension fund managers, Nico Life Insurance Company Limited, faulted most employers for failing to remit pension contributions to the administrators.
In an interview, ECAM Executive Director Beyani Munthali said factors including recurring power shortages are at play. Munthali was quick to point out that employers have made provisions to remit pension arrears, adding that the employers are aware of the need to comply with the Pension Act and appreciate pension as a social protection mechanism.