A mix of pension costs
Someone works for 30 years and it is time to go. Employers give them a bicycle and a cheque that can only pay for living expenses not beyond a month. The only lucky ones have been civil servants that have enjoyed a 100 percent funded employer pension.
As we agonise and possibly debate the pension law, it is important for each worker to draw some positives. For the first time, workers outside the civil service will have a pension instead of bicycles after many years of service.
I believe all fair-minded trade unions reckon this has been a major change in protecting the rights of workers at the expense of vulture employers. But the controversy is not far from over.
Take for instance, the life expectancy argument. There is notion that not many of us will live long enough to access our retirement funds. It is a fear that is human in light of a health system that is on its knees. Fair enough, fear is fear, we have to fear it. Should we change the law to access our pension once we change jobs? How many times are we going to retire?
Employees have been short-changed for long. Employers have even fought their way into the process of setting minimum wages that are quite pathetic. Some positives cannot be ignored though.
The Employment Act of 2001 has provided for severance pay. Similarly the special labour court was established and has helped to deal with industrial matters much quickly. It’s a mix bag but any employee can smile that the country has moved quickly to address rights of employees.
So, to start looking at the pension law, it is clear that the intention is to protect workers that have become destitute once they live their jobs. While one is worried about living long enough, the law provides for some relief if there is evidence that one is out of employment for a certain period.
It is important to note that employers are not responsible for our lives after we retire but the law has made it them be part of it through compulsory contributions.
The notion of accessing your retirement funds at the age of 30, for example, defeats the whole notion of a pensioner. Most of us do not save enough or none at all for various reasons. Personal finance experts often teach us that the best way to save is to make automatic deductions and put them in a nest that is not easily accessible. The pension law simply helps most of us that struggle to save, not because we receive little money but struggle to manage finances once our accounts are credited with our pay cheque.
Take life insurance for example. We take life insurance so that our dependents do not suffer in the event of our demise. The same goes for the pension that should be accessed once we reach the prescribed age.
I believe trade unions and employer representatives should put more effort in educating the general public. Insurance companies, most of which manage pension funds, are very clever and will hide alot of costs. Employees and their representatives should now find ways to get the best deal regarding which companies can manage their schemes.
It will simply set a huge ripple into competitive pricing of insurance and pension management services that appear to operate in some form of a doggy cartel. It is also important to take note that pension funds have a lot of tax advantages unlike other short-term instruments.
There are lot bargaining chips in the pension law such as directives issued by the registrar of insurance and pensions. The Malawian worker deserves better but we must accept that life in retirement is our responsibility and that no one should be retiring simply because they have been in the job for 20 years but are not yet 50 for instance.
No one deserves a bicycle or a wooden hoe after decades of employment.
