Some serving and retired officers from both the private sector and the civil service, calling themselves Pensions Act Amendment Movement (PAAM), have petitioned Minister of Labour to consider amending the Pension Act of 2010.
The petition dated July 22, 2020, has been copied the Speaker of Parliament, Human Rights Defenders Coalition, Malawi Congress of Trade Union, Youth and Society and Malawi Human Rights Commission.
It says much as the Pension Act of 2010 is important, it however, needs amendment so that it meets all its intended objectives.
“As it currently stands, we believe objective number four of the Act, which talks of fostering agglomeration of national servings in support of economic growth and national development, is not being achieved in a satisfying way.
“For instance, the Act stipulates that one can access funds of about 40% after there is proof that they have been jobless for a period of about six months.
“Our view on this is that a lot of people suffer a lot during the six-month period of unemployment so much that when the time comes to access the provided 40% in question, there are so much debts to be sorted out, thereby leaving a pensioner with insufficient funds to invest into a reliable entrepreneurial venture.”
PAAM proposes that the Act should let one access the funds as soon as the calculations are done by the insurance companies — that is within four weeks, at most.
They are saying the Act was not well framed and does not put the pensioner at the heart but the insurance company and the employer instead.
“When there is kwacha devaluation, the Act does not protect the pensioner. Instead, the pensioner suffers a loss.”
PAAM says the Act gave the employer mandate to choose the best life insurance policy for the employee but they propose an amendment opportunity that would allow an employee to have a say on the choice or choose the best policy that suits their needs.
“e feel that with the current Pensions Act, there is going to be no room for vacancies in organizations and no chances of creating more businesses to create more jobs.
“There are a lot of people who are working, with enough capital accumulated in pension contributions, willing to quit and have very sound business ventures but they can’t quit because the Act does not allow them to have their money before they serve for 20 years (in civil service), prove to have stayed for six months without a job (in private sector and just to access only 40%) and get to 60 years of stipulated retirement age (for an employee to get 60% or all of the funds).
“We, therefore, propose that the Act should be amended back to the provisions that it had on this before 2011 where employees could quit their jobs thereby creating vacancies in the organizations they are leaving thus, creating new jobs in their business endeavors.
“One person quitting one’s job may have the potential to create 3 to 5 jobs or more. This in turn would foster economic growth and national development that would start at individual level.”
They are also asking fluidity in the way one accesses their pension funds such as that one should be free to choose whether to get all the funds at once or not, if working for an NGO and once their contract ends to give room to those with good business ideas to have a springboard to start from and also to give a chance to others who may not properly safeguard their funds to have it in phases.
“If in Government, the funds should be accessible in full or in part after serving for 10 years [and] the amount should be determined by the pensioner him or herself.
“Lastly, it is unanimously agreed that amending the Pension Act of 2010 will facilitate development of both individual pensioners and the nation as a whole as already alluded to above.
“Given that those employees that are below the age of 60 are allowed access to their pension money, there are high chances that they can invest in businesses, employ others and help alleviate poverty by boosting the economy of this country, since they would still be energetic and productive with brilliant business ideas.”
PAAM concludes by commending the Tonse government for its brilliant ideas and zeal to create more jobs as well as taking the interest of the youths at heart and hope that the petition is not far from the transformative ideas that the Tonse Alliance has concerning development of Malawi and its citizens.