According to the June 2020 Financial Stability Report (FSR) published recently by the Reserve Bank of Malawi (RBM), pension contributions declined by K5.9 billion to K55.6 billion during the first half of 2019. On the other hand, outstanding pension contributions rose to K24.4 billion during the same.
The above has been attributed to the coronavirus pandemic, as employers are facing a lot of challenges which threaten employment, while the implementation of the 16.5% value added tax (VAT) levied on pension administration fees is also a problem.
In June this year, it was announced that 4,024 pensioners were not verified, as the Treasury indicated that the Government Pension Payroll contains 37,984 pensioners, of which 33,960 pensioners were physically verified. However, the Treasury Spokesperson said that pensioners had been showing up for verification so the number may decrease. “The figure for those who did not avail themselves might reduce because it could be that they are in the diaspora.” said Banda. By the end of 2019, outstanding pension contributions rose from K13.1 billion in 2018, to K20 billion, according to the 2019 Financial Institutions Supervision Report by the Reserve Bank of Malawi.