A group called Concerned Employees and Pensioners from both the private sector and civil service has petitioned President Lazarus Chakwera for an amendment of the Pensions Act of 2010.
The Human Resource Society of Malawi, a grouping of human resource management practitioners, has since agreed that there is indeed need for a review and amendment of some sections of the Act.
Among other amendments in the Act, the group wants pension funds to be accessed soon after calculations are done by insurance companies and that employees should have a choice of insurance policies to suit their needs.
According to Sections 64 and 65 of the Pension Act, which outlines conditions for payment of benefits, to access benefits, one has to produce proof to have been unemployed for six months after their last employment.
The grouping, comprising of both serving and retired officers, says this has adverse financial implications on the beneficiaries.
Reads the petition in part: “Our view on this is that many people suffer a lot during the said period of unemployment [six months] so much that when the time comes to access the benefits in question, there are so many debts to be settled.
“Consequently, a pensioner is left with insufficient funds to invest in a reliable venture. We, therefore, propose an amendment to this provision.”
They also want employers to let employees have a say when selecting insurance companies, indicating that when the Act was being framed, it did not consider the employees who are the pensioners.
Further, the group also proposes a revision in the retirement age of 60 years, emphasising the need to reduce the number so that more youths can be employed.
The group is of the view that when pensioners are given their funds below 60 years of age, prospects are high that they will invest in businesses and in turn alleviate poverty in the country through job creation, among others.
In addition, the group also proposes that employees in the private sector should have an option to access pension funds in full once their contracts are terminated.
In a written response yesterday, HRSM vice-president Benson Jackson said a review and amendment of the Act would ensure that it serves the purpose it was enacted for.
He said: “HRSM is in agreement with the call to reduce the waiting period [six months] for one to access their funds upon loss of a job or inability to secure employment.
“There is need for all concerned parties to come together and agree to a reasonable period to access the funds. Due care should be taken to give the pension administrator time to properly calculate all contributions and bonuses.”
When contacted yesterday, State House director of communication and executive assistant to the President Sean Kampondeni asked for more time to follow up on the matter.
In 2012, Bakhresa Grain Milling human resource manager Richard Tchereko also said the Act has numerous challenges affecting both employers and employees.
He observed that, among others, Section 65 of the Act on payment of benefits is a grey area.