The Malawi National Assembly has passed the Pension Bill which was presented in Parliament by Finance Minister Sosten Gwengwe. According to Ngwengwe, “the Pension Bill seeks to replace the current Pension Act to ensure proper management of the pension but also for employees to benefit from their contributions.”
Unpacking the bill, Ngwengwe said the retirement age will be determined by the condition of service as opposed to having a fixed retirement age. The fixed retirement age was upon reaching 60 years . The bill also provides for the establishment of a national pension scheme with a voluntary option to join the scheme.
The bill received bi-partisan support from the government as well as the opposition lawmakers. Making her input, the leader of UDF, Lilian Patel, said “The bill will reduce the suffering of pensioners in Malawi.”
The bill has proposed a K150 million fee as a penalty for companies that default remittance of pension contributions. The companies will also risk being closed. The waiting period to access part of the pension for someone that has lost a job has been reduced from 6 months to 3 months.
Those retired will be able to access 50 percent of the total contributions including interests accumulated at once. An employee will also be allowed to access 50 percent of total contributions five years before retirement. This is expected to help people prepare for retirement.
According to Gwengwe people will be able to do something with their money before retirement. Progressive piece of legislation, so it appears.