The Reserve Bank of Malawi (RBM) has said it will soon name and shame private companies that have not been remitting their employees’ pension contributions to pension fund administrators.
The central bank says so far the money private firms are hoarding is about K3 billion.
A month ago RBM published a list of 18 statutory corporations and councils that were not remitting employees pension contributions in a bid to force compliance.
The statutory corporations and councils owe fund managers over K5.6 billion accumulated over six years, according to RBM spokesperson Mbane Ngwira.
He said the naming and shaming method is bearing fruit as evidenced by the outcome from the reaction of the statutory corporations and councils after publication of the list last month.
“Some have paid their arrears after being exposed while others have proposed for a repayment plan from the bank.
“RBM is achieving its objective of making the companies pay the arrears to pension fund managers to safeguard the employees’ pensions,” explained Ngwira.
Pension experts say failure to remit employees pension funds is gross irresponsibility on the part of employers as employees lose out on getting maximum benefits from their pensions coming from investing the funds.
“The non-remittance of deducted pension contributions of workers is an economic crime and RBM must not relent on this,” said one expert on Wednesday.
One of the country’s fund administrators Nico Life chief executive officer Eric Chapola said after the first list was published there is a slight improvement in remittance.
“We have seen parastatals and some private companies paying up their outstanding contributions. But the problem still remains as some companies are not remitting,” he said.
Mzuzu City Council (MCC) is one of the councils which was shamed last month having owed pension fund managers arrears amounting to K48 million for six years.
MCC chief executive officer McCloud Kadam’manja said Wednesday the council will settle the arrears by March this year.
On his part, Blantyre Water Board chief executive officer Dan Chiweza said the utility company is waiting for RBM to respond to their proposed payment plan. The utility firm’s arrears stand at K717.6 million. Other culprits according to RBM are Agriculture Development and Marketing Corporation (Admarc) whose arrears stand at K1.3 billion, Lilongwe University of Agriculture and Natural Resources (Luanar) at K958.1 million and Malawi Broadcating Corporation at K854.5 million.