Parliament has passed a pension bill which was presented in the National Assembly by Minister of Finance Sosten Gwengwe.
“The Pension Bill seeks to replace the current Pension Act to ensure proper management of the pension but also for employees to benefit from their contributions,” said Gwengwe.
He also said in the bill, the retirement age will be determined by the condition of service as opposed to having a fixed retirement age.
According to the finance minister, the bill also provides for the establishment of a national pension scheme with a voluntary option to join the scheme.
Both United Democratic Front (UDF) and the Democratic Progressive Party (DPP) agreed on the importance of the bill.
Taking her turn, the leader of UDF, Lilian Patel, said “The bill will reduce the suffering of pensioners in Malawi.”
Speaking on behalf of the DPP, Parliamentarian for Mangochi- MonkeyBay, Ralph Jooma concurred with Patel on the importance of the bill.
The bill has proposed a K150 million fee as a penalty for companies that default remittance of pension contributions. The companies will also risk being closed.
The waiting period to access part of the pension for someone that has lost a job has been reduced from 6 months to 3 months.
Those retired will be able to access 50 percent of the total contributions including interests accumulated at once.
An employee will also be allowed to access 50 percent of total contributions five years before retirement. This is expected to help people prepare for retirement.
According to Gwengwe people will be able to do something with their money before retirement.