By Steven Godfrey Mkweteza & Mayamiko Phiri, Correspondents
Old Mutual Malawi Plc has raised red flags over the high rate of pension funds remittances by employers — a development which is contributing to poor administration of the contributions.
General manager responsible for the pension services for the company, Tawonga Manda said this in Blantyre on Thursday during an interactive trustees’ conference on pension funds, saying many employers are remitting the funds when the employee is either retired or dead.
“This delay the process of calculating the benefits, hence missing the target of processing them within 14 days areper what the law requires,” he said.
He added that Old Mutual is currently having a backlog of late submissions to be processed, a development which he said contributes to delayed distribution of the funds to the beneficiaries that sometimes attracts law suits.
Manda also mentioned accumulated arrears and penalties for late contributors as the other major concern to the administration of the funds.
“We still have a long way to go to sensitise the general masses especially the employers on what the law says about adminstration of pension funds,” he said adding that failing to remit employees pensions contributions is punishable under the Pension Act.
The general manager, therefore, said it was in this view that his company thought of organising the trustees conference to clarify some of the cumbersome issues on pension funds.
In an interview, human resources manager for Reunion Insurance Company, Deborah Ntaba, described the conference as an eye opener and a refresher on challenges facing the companies on processing the pension funds in the country.
Ntaba observed that knowledge gap among the players was the main challenge facing the companies.
“Yes, I agree that sensitisation on the Pension Act is the way to go to address this — most especially the people from the rural areas who are not conversant than those literates in the urban areas.
“These people need to understand that it is long or cumbersome to process the pension funds. Sometimes it takes more than 14 days,mostly when an employee is dead,” she said.
Old Mutual Malawi Plc is one of the leading Malawian insurance company listed on the Malawi Stock Exchange to among others, administer pension funds, general and life insurance and financial market.