Assessing Effectiveness Of Mandatory Contributory Pension Scheme In Non-Governmental Organizations: A Case Study Of Baylor College Of Medicine-Children’s Foundation Malawi

Abstract

Malawi recently initiated reforms of its pension system in order to improve effectiveness of pension administration. This study sought to assess the effectiveness of a mandatory contributory pension scheme in Non-Governmental Organizations in Malawi. The research adopted a descriptive research design in a mixed methods approach. Semi-structured selfadministered questionnaires were used to collect data from 264 and 20 randomly sampled and purposively sampled Respondents which included Baylor active staff, Baylor ex staff, fund administrators, investment managers, Reserve Bank officer and Labor Officer, respectively. Results show that the odds of rating pension management as “effective” are two times more among Respondents with at least five years of working experience, compared to those that work for one year or less (Adjusted OR = 2.233; 95% CI: 1.145, 4.355). Factors such as: “trustees not being involved in investment”, “unavailability of advanced Information Technology”; “lack of knowledge by pension members”; and “country's unstable economy”, contributed to ineffective pension management. Also, non-remittance of pension, lack of transparency by pension administrators, trans-organizational transfer of pension funds, and lack of supervision by labour officers are some of the challenges associated with pension management in Malawi. The findings suggest that the perception is that the contributory pension system is not effective. Therefore, Malawi government should collaborate with PFA in conducting massive public awareness on pension issues, train trustees, and invest in advanced technology to promote efficiency on the way pension funds are being managed in Malawi