Africa-Press – Malawi. Malawi’s pension money has grown very fast, reaching K5.4 trillion by June 2025. This is a big jump from K3.5 trillion recorded in December 2024, according to the Reserve Bank of Malawi’s latest Financial Stability Report.
The central bank says this growth happened because pension funds made good profits from their investments and more people contributed to their pension accounts. Total contributions went up by 7.2 percent, and membership grew by 25 percent to more than 772 000 people.
But the good news comes with serious problems.
Most of the pension money is invested in only two areas — the stock market and government securities — making up 85.5 percent of all pension investments. This means if the stock market performs badly or the government faces financial trouble, people’s pension money could be at risk.
Another big problem is pension arrears. This is money that employers deducted from workers’ salaries but did not send to pension administrators. These arrears continue to grow and reached K107 billion by June 2025.
The Reserve Bank warns that when employers fail to send pension contributions on time, workers may struggle to receive their pension money when they retire. This also reduces the amount of money that pension funds can invest, lowering future returns and weakening trust in the entire pension system.
The bank says it is working on new rules that will force pension funds to invest in different sectors to reduce risk and protect people’s savings.
Workers’ unions are worried. Malawi Congress of Trade Unions (MCTU) president Charles Kumchenga said many workers lose their pension savings because employers simply do not remit the money.
He said this is unfair and illegal because employers deduct the money but fail to pass it on. He added that Malawi has many pension policies, but they are not being followed.
On the other hand, Employers Consultative Association of Malawi executive director George Khaki said some employers are struggling because the economy is tough, but many are still trying to follow the law. He encouraged those who are failing to communicate with their workers and the regulator to find a solution.
Financial analyst Kondwani Makwakwa warned that these arrears not only reduce confidence among workers, but also weaken pension funds’ ability to invest and grow the economy.
Reserve Bank Governor Macdonald Mafuta-Mwale has said Malawi needs to use pension savings to support economic development and promised to help the industry diversify its investments.
The Pension Act 2023, which replaced the 2011 law, brought several reforms, including new rules on how pension funds are run, how benefits are paid, and when people can access their money.
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