Figures from the Reserve Bank of Malawi have shown that despite registering growth last year, pension funds investments return declined by 5.9%.

According to the 2018 Financial Institutions Supervision Report, pension funds achieved an investment return of 21% in 2018 compared to 26.9% in 2017 on account of a combination of a lower return on the Malawi All Share Index (Masi) and the low interest environment.

The report shows that during the review period, annual pension contributions increased to K98.3 billion from K62.5 billion in 2017 due to growth in membership and general increases in pensionable emoluments. On the other hand, membership of the national pension scheme, increased to 406 068 in 2018 from 304 256 in 2017, largely following the inclusion of the newly-registered pension funds into the industry while pension contribution arrears rose to K13.1 billion from K9.9 billion in 2017, equivalent to 1.8% of total assets on account of contribution arrears amounting to K2.8 billion by newly-registered pension funds.

“The return on Masi dropped to 34.2 percent in December 2018 compared to 62.1 percent in December 2017 and adversely affected pension funds since 38.1 percent of the pension fund assets were invested in listed equities.” said the report.