Saturday, 3 March 2018

Tier 2&3 pension contributions accrue GHC10.9bn

Related image 

Adnan Adams Mohammed

So far, pensions fund managers and trustees of the Tier 2 and Tier 3 privately managed pension funds have in their custody close to GHC11 billion as contributions from member schemes.

These funds are available for investment in the economy.

In some countries, pensions funds have been the bedrock of their infrastructural development, Ghana is envisioning to develop and grow the pension’s funds to also be the bedrock for its infrastructural development.

The National Pensions Regulatory Authority (NPRA), which disclosed this to journalists in Accra at a day’s training workshop last week, is also seeking full authority to help enforce the laws governing pensions in the country to ensure full compliance by all stakeholders.

The NPRA is thereby asking for prosecutorial powers to punish defaulting stakeholders to help ensure discipline, integrity and professionalism in the industry.

The authority is also calling for fast track passage of the Consumer Protection Bill so as to help protect the interests of pension’s contributors.

The workshop among other things educated the media practitioners about pensions in Ghana before the reforms, relevance of pensions, background to the pensions reforms, coverage and exemption of the scheme, the new three-tier pension scheme and the legal mandate of service providers.

Mr Hayford Attah Krufi, Chief Executive Officer of NPRAexplained at the training that, the Pension scheme was a necessary old- age security system for the aged, and a modern mechanism to provide retirement income to the aged for maintenance of their standard of living.

He said the days of the traditional ways of taking care of the aged in the extended family system, which addressed the issue of looking after the elderly were over, due to scarce resources, societal pressure, urbanization, industrialization and migration.

Mr Krufi emphasized that the objective was to provide pension benefits in order to ensure retirement income security for workers as well as ensure that every worker receives retirement and related benefits.

He said the new three tier pensions scheme had been categorized into three under the new National Pensions Act, 2008 (Act 766) namely the Basic National Social Security, the Occupational Pension Scheme and the Voluntary Group/ Personal Pension Scheme, all of which had their basic principles and stressed that it was mandatory for all employers to pay their employees pensions.

Mr Emmanuel Dagbenu, the Corporate Affairs manager of NPRA presenting a paper on “Understanding the 3-Tier Pension Scheme” said the minimum age for membership under this  Act was 15 years and the maximum age was 45 years for new entrants.

He explained that the contribution rate is 13.5 per cent of workers’ monthly salary, out of which 2.5 per cent is levied for health care under the National Health Insurance Scheme, leaving 11 per cent for the pension scheme.

He said the old-age pension benefit required a maximum contribution period of 15 years (180 months) in aggregate while the survivors’ benefit is payable on death and the invalidity comes in the form of pension and required a contribution period of not less than 12 months within the last 36 months before the occurrence of the invalidity.

He said the improvement benefit had been reduced from 20 years to 15 years and survivors’ benefit computation period increased from 12 to 15 years while hazardous employment benefit for underground miners means they could retire and receive their benefits when they attain the age of 55.

He therefore called on all stakeholders to play their roles in educating and informing the public about the three types pension schemes in the system currently to ensure retirement income security to their members.