National Bank speaks out on pension funds
National Bank of Malawi (NBM) Capital Markets Limited says well organised unions in companies are important to safeguard pension funds for employees.
The bank says it is easy for company managers to abuse pension funds if they are directly involved in appointing trustees to run the funds.
NBM Capital Markets Limited Investments fund manager Benson Jere said that if management interferes in appointing trustees to oversee pension funds, the money is prone to abuse.
“If all companies have well organised unions, it is easy to appoint trustees to manage pension funds and the trustees are answerable to the employees. With this kind of arrangement it is difficult for company CEOs and managers to use the pension funds for other purposes,” said Jere in an interview in Lilongwe recently.
He said pension funds should be safeguarded at all cost because when one retires from gainful employment he should not be a burden to his children.
Jere said it is important that trustees should work without fearing management when controlling pension funds because the money is for employees.
“In the recent past some employees have complained that their pension funds have been abused because some company managers appointed their friends to be trustees and use the money for other things,” he said.
One of the participants, Irene Dzanjalimodzi, who is the human resource manager for Lilongwe Water Board, said the Pension Act has given employees ammunition to control their pension funds.
“Before the Pension Act, not all companies were putting their employees on the pension scheme, but now it is mandatory. It is important that companies should segregate their accounts to avoid abuse of pension funds,” she said.
Dzanjalimodzi said the pension funds should be beneficial to the employees and if all companies can have unions, they must be given the mandate to appoint trustees for the pension funds.
