Pension
In Malawi, the retirement age ranges between 50 (minimum) to 70 (maximum) years. At least 20 years of continuous service and contributions are required to qualify for the old-age pension. Employers must ensure that their employees are part of the mandatory National Pension Scheme.
Pension benefits are paid as an annuity and depend on the amount in the pension fund. Retired employees may also choose to receive a maximum lump sum of 50% of the pension fund amount, depending on their age.
Employees must contribute at least 5% of their pensionable salary to the National Pension Scheme, while employers must contribute a minimum of 10% of the employee's gross monthly payroll.
Dependents/Survivors Benefits
According to Malawi's Pension Act, an employee entitled to a pension can nominate family members (a spouse, child, or close relatives) and stipulate the benefit amount that will be shared between them after the employee's death. Benefits may be paid as a lump sum or annuity.
In case of death caused by work accidents or occupational diseases, employers must pay benefits to the survivors as a lump sum of 42 months of the deceased worker's last monthly earnings (minus any disability benefit paid before the date of death). If there are no surviving dependents, the employer will bear any medical attendance and funeral expenses.
Employees are required to pay at least 5% of their pensionable salary to the National Pension Scheme, while employers must contribute a minimum of 10% of the employee's pensionable emoluments.
Invalidity Benefits
In Malawi, employees can retire after being declared totally and permanently disabled by a medical doctor. The benefits can be paid in the form of a lump sum, scheduled payments, or used to purchase an annuity with the individual's pension fund's balance amount. Employers must also register their employees for a life insurance policy with a licensed insurance company. This requirement is satisfied if the employer enrolls the employee in a policy with the minimum coverage.
In case of disability caused by work accidents or occupational diseases, employees are eligible to receive benefits as follows:
- For a total and permanent disability, a lump sum of 54 months of the employee's average monthly earnings is paid. Additional compensation is provided if the employee requires constant attendance.
- For partial permanent disability, the benefit is calculated as a percentage of the benefit for total permanent disability proportional to the degree of disability.
- For temporary disability, the benefit is paid from the fourth day as a percentage of the employee's earnings until recovery or certification of permanent disability.
Employees must contribute at least 5% of their pensionable salary to the National Pension Scheme, while employers must contribute a minimum of 10% of the employee's gross monthly payroll.