This is a letter delivered today at Capitol Hill in Lilongwe, in the office of the Secretary to the Treasury access to pension funds by the private school teachers and the hospitality industry workers feeling the impact of the COVID-19 pandemic measures.
29th July, 2020
The Ministry of Finance
P.O. Box 30049
ATT: Secretary to the Treasury
CC: Director of Pensions and Financial Services
The Governor, Reserve Bank of Malawi (RBM)
RE: REQUEST FOR OFFICIAL INSTRUCTION AND GUIDANCE ON ACCESS TO PENSION FUNDS BY PRIVATE SCHOOL TEACHERS AND WORKERS IN THE HOSPITALITY INDUSTRY
Reference is made to the appeal by the Centre for Democracy and Economic Development Initiatives (CDEDI), released on 14 July, 2020, requesting government to consider approving a waiver that would allow private school teachers and workers in the hospitality industry to start accessing their pension funds as one way of mitigating the impact of loss of jobs due to the COVID-19 pandemic.
The call by CDEDI was made following serious impact some COVID-19 measures have had on the concerned workers, most of whom have lost their jobs, while others stopped receiving their salaries as far back as March, 2020 due to the closure of schools and loss of business by the hospitality industry. Currently, these people are struggling to make a living as they do not have any source of income to feed their families and let alone pay rentals, yet their pension funds are lying idle at the Reserve Bank of Malawi (RBM).
CDEDI is aware that the pension funds can only be accessed when one reaches retirement age, in accordance with section 64 of the Pension Act, while the employee’s own contribution towards the pension fund can only be accessed after it is established that the beneficiary has been out of employment for a period of 6 months from the last employment as per section 65 of the Pension Act. CDEDI’s appeal, therefore, was for government to intervene on the matter by considering approving a waiver for the affected employees to access their pension funds since the circumstances they are in at this moment, are neither the teachers’ fault, nor are they the employers’ fault. The government is only taking precautionary measures by protecting the citizenry, as stipulated in section 13 of the republican constitution.
As a response to CDEDI’s appeal, the nation was informed by the Ministry of Finance through its Spokesperson Mr. Williams Banda who told Zodiak Broadcasting Station (ZBS) in a news item aired on 14th July 2020 that the affected private school teachers and the workers in the hospitality industry were encouraged to officially write the ministry to access their money. CDEDI is in possession of a recording of the ministry’s response to the media inquiry, specifically ZBS.
However, it is very surprising to note that the affected teachers and workers in the hospitality industry are still registering complaints with CDEDI, indicating that their requests are being turned down at the ministry. CDEDI, therefore, would like to get government’s official position on this matter. Since this is a matter of life and death, bearing in mind that people’s lives are in danger due to the effects of the COVID-19 pandemic, we would like to hear from the ministry within 48 hours. We are very optimistic, however, that our humble request will be addressed with the urgency it deserves.
ACTING EXECUTIVE DIRECTOR.