Frequently asked questions

A pension is a type of retirement plan that provides a source of income to the pension contributors during their retirement years.

 Pension is a fund into which amounts are paid regularly during the individual’s working career, and from which periodic payments are made to support the pension contributor (member) after retiring from work.

Pensions are designed to provide financial security and a source of income to individuals when they are no longer working. The funds for pensions can be accumulated through contributions from the employee and employer, or both, over the course of the individual’s working life. The contributions are typically invested in various financial instruments, such as stocks, bonds, and mutual funds, with the goal of growing the fund over time and retaining value.  Pension can also offer security to family members upon death of the member.

A member can join the Continental Unrestricted Pension Fund(CUPF) either as an individual or through the employer to save for their retirement. Also note that you can make voluntary contributions over and above the mandatory pension contributions to add to your pension.

Continental pension services sends reports to members twice a year. In addition, members can access their benefits through the Continental Pension Services (CPS)  portal.

Payments to members are made with the guidance of the Pensions Act 2023 as follows:

  • When you reach the retirement age of your employer and respective pension fund: – a cash lumpsum of up to fifty (50) percent of the benefits in your account is paid out to the member. With the remaining  funds, a member can decide to purchase either a programmed withdrawal or an annuity.  However, If the benefits in the member’s account are below prescribed thresholds by the Registrar, a member may access the full pension amount at once.
  • Retirement based on total and permanent disability which incapacitates you from carrying out office functions – In this case the mode of payment is as above.
  • Retirement based on twenty (20) years of continuous employment with the same employer- The terms of  payment are as indicated above
  • When you leave employment under any circumstance and are unemployed for a continuous period of three (3) months or more, you can access only the employee contribution plus investment income thereof. The balance is preserved to be accessed when you reach retirement age.
  • The member is about to leave or has left Malawi permanently. In this case, 50% of the benefits are paid on grant of approval and the balance is paid after twelve months.
  • The member has died- in which case payment is made to the member’s nominated beneficiaries.
  • Benefits are paid to the member’s beneficiaries according to the nomination form signed by the member. Under the mandatory scheme, the pension benefits that accrue upon the demise of the member includes the accumulated pension benefits plus life insurance cover.
  • The nominated beneficiaries may be paid a lumpsum  except where the beneficiary is a minor (below eighteen years of age). In this case the funds are held by the  Trustee of the fund; the Trustee may make payments periodically for the welfare or education of the minor.

The law does not allow the use of   pension funds as collateral to get a loan, neither are you allowed to  attach the funds to any form of debt.

A member shall, upon retirement access his /her retirement benefits through either Programmed withdrawal or a Life Annuity

An annuity is a method   of receiving pension benefits by a retiree through a contract purchased from a Life Insurance Company. It provides a guaranteed periodic income (pension) to a retiree throughout his/her life after retirement.  Members may utilize 50% or more of the benefits at retirement to purchase an annuity and in turn they are paid a periodic income for life. Annuities are provided by life assurance companies.

Programmed withdrawal is a mode of benefits withdrawal by which retired members receive pension through their pension fund Administrator on a periodic basis i.e. monthly or quarterly . Members may place 50% or more of their benefits upon retirement in a programmed withdrawal account which is utilized to give them a guaranteed income. Programmed withdrawals may be provided by pension administrators or fund Managers.

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