How is my pension package calculated?

The Pension Act of 2010 allows for an employee as a Pension Fund Member, to contribute a minimum of 5% of their gross pay each month into their pension pool. Employers are mandated to contribute a minimum of 10% of their employee’s gross pay each month into the employee’s pension pool. As a pension administrator, NICO Pension Services Limited grants annual bonuses into the pool. These three elements together constitute the pension pool.

Upon retirement due to age, 40% of the pension pool is paid to the member. 60% is used to purchase an annuity. This is a life insurance product that pays the member an amount of money each month for life.

In the event of the member’s death, beneficiaries chosen by the member will receive annuity payments until the close of the chosen guarantee period. The member has the option to purchase the guarantee or not. If the member chooses to purchase the guarantee, it is offered for 5 or 10 years.

What is the amount that I can claim after 6 months of unemployment?
The Pension Act of 2010 allows that as a Pension Fund Member you may claim part of your pension pool after going unemployed for 6 months. The amount that is permitted is what was contributed into your pension pool by yourself as a pension fund member and the bonuses that were generated by your contributions. The amount that was contributed by your employer and the bonuses thereon cannot be claimed until you reach retirement age.
How do I raise a claim for my pension upon reaching retirement age?

To raise a claim for your pension upon reaching retirement age, the following procedure must be followed:

  • The former employer raises a claim by submitting the following documentation to NICO Pension Services Limited:
    • A filled claim form
    • A copy of the member’s National ID
    • A copy of the member’s bank deposit slip (as proof of an active bank account)
  • If the submitted documentation is in order, an application for approval to pay is made to the Reserve Bank of Malawi within 2 working days.
  • The signed off Retirement Discharge Form is shared back to NICO Pension Services Limited by the employer.
  • Upon receipt of the signed Retirement Discharge Form, NICO Pension Services Limited takes 48 hours to process the payment into the specified active bank account.
  • If the member’s retirement package is less than K5,440,000 at the age of 50 years, the member is allowed to get the full amount. If it is more than this amount, the member will get 40% as a lump sum and 60% will be used to purchase an annuity.

If the provided documentation is not sufficient, the claim cannot be processed. It is therefore important to ensure that complete documentation is submitted.

How can I get my pension statement?

To access your pension statement, please login on the online portal. It is accessible on the link . Create your account through a self registration. It is also accessible through the USSD self service channel on *323#. Create your account through a self registration.

What is the Ufulu Unrestricted Fund?
According to the Pension Act 2010 an “Unrestricted Fund” is a pension fund whose rules do not restrict membership of the fund to officers and employees of a specified employer and its related corporate bodies. This allows individuals as well as employers to invest their pension contributions collectively.