Employees' Perception of the Contributory Pension Scheme (CPS) and Its Implementation Effect in Malawi’s Shire Highlands Education Division.
Journal Title: Journal of Economics, Finance and Management Studies - Year 2024, Vol 7, Issue 01
Abstract
There have been dynamics in the pension systems globally which have witnessed various countries embracing the pension reforms within their Pension Scheme arrangements in respective jurisdictions. This evolution compelled Malawi to introduce the Contributory Pension Scheme (CPS) in 2011, targeting all employees, but received it with mixed feelings. This study purposed to establish public secondary school teachers’ perception of the CPS and its implementation effect. The study was guided by three objectives which were; to assess secondary school teachers’ knowledge levels of the CPS; to describe the perception of secondary school teachers about the CPS, and to establish factors that influence secondary school teachers’ perception of the CPS. A mixed method approach was used with questionnaires and scheduled interviews as data collection tools. Slovin’s formulae was used to derive the sample size of 240 employees from the 2000 target population. Purposive and random sampling were used as sampling techniques in which 240 were targeted for questionnaire administration on drop-and-pick-basis, while 5 respondents were selected purposively for qualitative data collection through scheduled interviews. Descriptive statistics was used to analyze quantitative data using SPSS V25 while qualitative data was firstly organized, reviewed and later themedfor content analysis. The response rate was 90.8%. The study results show that secondary school teachers’ knowledge levels of the CPS are low as indicated by 50% of the respondents. Similarly, 57% stated that they do not accept the CPS as a replacement to Defined Benefit Pension Scheme (DBPS) owing to the haphazard manner in which it was implemented with a strong perception that it was devoid of stakeholder consultation / engagement.On the other hand, 62% stated that they did not receive required scheme transaction and funds information of the new pension scheme as a major factor for the none acceptance, contrary to the aspirations of the Agency-Principal Theory. To this effect, the study concluded that despite the many merits of the CPS, employees are lacking some basic information on how their contributions are made, kept, and the pre-retirement utilization of the same by the Administrative Managers. Therefore, the study strongly recommends a paradigm shift in the management and administration of the scheme, by among others, entrenching principles of corporate governance of being transparent, accountable, ethical, responsible, and responsive to the primary stakeholders’ information needs from government and Administrators / Managers of the scheme in the manner of handling the funds on behalf of the pensioners as the same has implications on employees’ work motivation. There must be intentional communication to all pensioners in raising awareness of all activities related, and /or incidental to the pension scheme in order to demystify all misconceptions and negative publicity of funds misuse by the Administrators and Managers.
Authors and Affiliations
Samuel Nsambo, Chaste Nsama, Chrine C. Hapompwe
Keywords
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- EP ID EP729902
- DOI 10.47191/jefms/v7-i1-60
- Views 98
- Downloads 0
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