Pension assets double

Malawi’s pension industry recorded its strongest financial performance on record in 2025, with total assets more than doubling to K8.4 trillion and investment income soaring to K5 trillion, but rising unpaid employer pension contributions continue to threaten workers’ retirement savings. The 2025 Annual Report by the Registrar of Financial Institutions shows pension fund assets increased by 139.5 percent from K3.5 trillion in 2024, largely driven by exceptional gains on listed shares on the Malawi Stock Exchange and rising pension contributions. The report says investment income jumped by 411.1 percent to K5 trillion from K981.1 billion the previous year, producing an annual investment return of 84 percent, well above the average inflation rate of 26 percent.

Membership of the National Pension Scheme also grew by 10.4 percent to 712 354 workers, mainly due to intensified enforcement and awareness campaigns. However, the report says the industry’s record performance masks a growing compliance problem, with employer pension contribution arrears rising sharply to K144.5 billion from K86.5 billion in 2024. “Despite the positive development, contribution arrears continued to accumulate,” reads the report, which describes the build-up of arrears as one of the sector’s key regulatory concerns.

The regulator established a dedicated Pension Compliance and Support Department (Pecos) in February 2025 to strengthen enforcement of the Pension Act, saying the move was intended to protect employees’ pension interests by improving employer compliance. Although the proportion of employers failing to remit pension contributions within the statutory period declined to about 30 percent from 41 percent in 2024, the Registrar recovered only K11.2 billion in outstanding arrears during the year. Employer Consultative Association of Malawi (Ecam) executive director George Khakhi attributed the growing arrears to the difficult business environment.

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“Many employers are still struggling to remit pension contributions mainly because the business environment is not conducive for businesses to operate optimally and thus make profits,” he said. Khakhi said foreign exchange shortages, persistent inflation and high borrowing costs had weakened companies’ cash flows, making it difficult for some firms to meet both payroll and statutory obligations. “Even paying wages is an uphill task to the extent that some employers are shedding staff and others are ceasing operations,” he said.

He said Ecam has proposed practical repayment arrangements with the Reserve Bank of Malawi and is seeking a joint meeting with the regulator to agree on sustainable solutions. Public Service Pension Trust Fund statutory manager Stain Singo also confirmed that government-related pension obligations remain outstanding, although he declined to disclose figures before ongoing reconciliations are completed.

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