Malawi: French style retirement reform causes chaos

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What age should one retire? This seems to be a current contentious topic both in Africa and Europe and dominating media space. In Malawi, workers have been infuriated by a draft pension bill which wants retirement age for women to be at 55 and men at 60. It is the first time that the country will have a law specifying a retirement age.

This, according to reports has caused most workers to hurriedly seek early retirement before it is passed into law, as labour experts argue that this age bracket is far too high in a country like Malawi, where the World Health Organisation estimates the average life expectancy at 50 years.

In France, demonstrations by workers on government plans to raise the
retirement age had by October 21 entered its 10th day and severely affected the country’s transport sector, despite the organisations having been at the forefront of the largely peaceful campaign to prevent the government from unilaterally imposing the new law rising the minimum retirement age from 60 to 62.

Up until now, companies in Malawi set their own arrangements with their employees, who pay into a savings fund – which is commonly called ‘pension fund’ – that they can access whenever they need to. But reports say the proposed bill will formalise pension schemes, make them mandatory and allow employees to access the money only after they have reached the specified retirement age.

According to the draft bill, workers may retire before the stipulated age only under special circumstances, such as for medically-certified health problems or permanent emigration from Malawi, reports say.

“Making people wait until they are 60 years old to get their pension is cheating people,” says Malawi Congress of Trade Unions (MCTU) president Luther Mambala who is believes that if approved, the bill will mean that most people will never be able to reap the benefits of their labour.

The draft bill, according to Mambala would be modelled on the pension laws of developed countries where life expectancy is high, without taking into consideration the different circumstances in Malawi.

And as Mambala fights for the retirement age in the draft bill to be lowered to 40 years for women and 45 years for men, reports indicate that many employees have started to resign from their jobs in order to collect their share of the ‘pension’ or savings fund, fearing that they will not see any of their money if the bill gets passed in parliament.

The proposed bill has also already had an impact on Malawians’ ability to apply for loans. Before the bill was tabled, employees could use their ‘pension’ fund as security for a loan, but since government announced the draft of the pension bill, banks have changed the rules.

Labour minister Yunus Mussa is quoted saying the bill only seeks to safeguard workers after retirement and assist old people to continue
enjoying life.

In Zimbabwe, a proposal is on the table to increase the retirement age
of lecturers to 70 from the current 65.

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