Pension (Pensionable Emoluments) Directive, 2014

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The Malawi Gazette Supplement, dated 29th August, 2014, containing Regulations, Rules, etc. (No. 14A)

GOVERNMENT NO. 32

PENSION ACT, 2010
(ACT NO. 6 OF 2011)

PENSION (PENSIONABLE EMOLUMENTS) DIRECTIVE, 2014

ARRANGEMENT OF PARAGRAPHS

PARAGRAPHS

1. Short title
2. Application

PART I.—PRELIMINARY

PART II.—OBJECTIVES
3. Objectives

PART III.—DETERMINATION OF PENSIONABLE EMOLUMENTS
4. Pensionable emoluments
5. Exclusions from pensionable emoluments

IN EXERCISE of the powers conferred by section 48 of the Pension Act, 2010, I, CHARLES CHUKA, Registrar of Financial Institutions issue the following Directive—

PART I.—PRELIMINARY

1. This Directive may be cited as the Pension (Pensionable Short title
   Emoluments) Directive, 2014.

2. This Directive shall apply to all employers and employees to which Application
   the Pension Act, 2010 applies.

PART II.—OBJECTIVES

3. The objectives of this Directive are to— Objectives
   (a) provide for details of what constitutes pensionable emoluments; and (b) provide a basis for calculation of pension contributions.

PART III.—DETERMINATION OF PENSIONABLE EMOLUMENTS

4.—(1) For purposes of calculating pension contributions under section Pensionable 12 of the Act, pensionable emoluments shall include the following— emoluments (a) guaranteed wages; (b) housing or accommodation allowance; (c) commissions payable regularly either as the only form of remuneration, or in addition to a minimum basic pay; and (d) any other allowance received by an employee in cash in the course of his normal duties as outlined in the employee’s contract of employment.

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(2) For purposes of this paragraph—
(a) an ‘allowance’ shall constitute any cash payment made to an, employee in addition to his basic salary as provided in the employees contract of employment, except those listed as exclusions in paragraph 5 ; and (b) a housing or accommodation allowance shall only be included as part of pensionable emoluments if such allowance is not payable in lieu of provision of accommodation, and exceeds forty percent (40%) of an employee’s guaranteed wages, and where a housing or accommoda- tion allowance exceeds forty percent (40%) of guaranteed wages, only the excess amount shall be included as part of pensionable emoluments.

5. For purposes of calculating pension contributions under section 12 Exclusions
   of the Act, pensionable emoluments shall not include the following, unless a from contract of employment or collective agreement expressly provides pensionable otherwise— emoluments (a) any cash payment or payment in kind provided to enable an employee to work, including an equipment, tool or similar allowance and which includes a hardship allowance; (b) a business travel allowance; (c) disability and workers compensation; (d) protective clothing and equipment; (e) a utilities allowance; (f) a domestic workers’ allowance; (g) a security allowance; (h) a relocation allowance; (i) tips received from customers and gifts from an employer; (j) share incentive schemes; (k) a bonus relating to performance of an employment contract except where it is the only form of remuneration; (l) discretionary payments not related to an employee’s hours of work or performance, including a discretionary profit-sharing scheme; (m) benefits in kind such as meal vouchers, security provision, medical aid and similar insurance schemes; (n) an entertainment entitlement or entertainment allowance; (o) an education entitlement or education allowance; (p) payments for overtime, including payments for hours worked in excess of those stipulated in an employee’s contract of employment; (q) an acting allowance or any allowances for the performance of duties which do not form an integral part of the duties of an officer’s own post including occasional work performed for another department or office;

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(r) any payment in lieu of leave holidays; (s) leave grant; (t) any payment made in consequence of an achievement award; (u) provision of an allowance in lieu of a car or fuel; (v) a membership allowance to clubs or a professional body; (w) subsistence allowances; (x) spouse’s allowance; (y) a furniture allowance; (z) director’s fees or sitting allowances; and (aa) any other payment as may be determined by the Registrar.

Made this 29th day of July, 2014.

C. S. R. CHUKA
(REF. NO. PED/01/02) Registrar