The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has added its views on concerns raised by pension fund managers that companies are not consistently remitting pension contributions.
Over the weekend, Nico Life Insurance Company Limited disclosed that some companies and institutions owe the company K4 billion in pension contributions.
MCCCI Chief Executive Officer, Chancellor Kaferapanjira, described the development as unfortunate.
“I am aware of the situation and it is not an issue that has affected Nico Life only but other pension fund managers have also complained of the same challenge. This practice is illegal according to the Pension Act as it deprives pension beneficiaries, that is to, he said.
Kaferapanjira said the reason given by defaulting companies is cash flow problems.
“There have been cases where employers have asked the Ministry of Labour, Youths , Sports and Manpower Development to choose between them keeping employees in their books or retrenching the employees.
“The ministry, of course as expected has chosen the former, keeping employees on the job. We cannot rule out the possibility of some companies that are not necessarily in taking advantage but this indicates how far the current hostile business environment has pushed companies,” Kaferapanjira said.
He further said the effects of erratic supply of electricity, corruption and tax administration have dented businesses’ performance.
Kaferapanjira further noted that the government has also taken long to start remitting pension contributions of civil servants and said it is still not clear if the situation has changed following a commitment from the Minister of Finance, Economic Planning and Development to start doing so in his 2017/18 Budget Statement.
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