Journalists Schooled On Pension Schemes

Rose Kwei, Informal Economy Desk Officer of TUC

Over the years, concerns have been raised about inadequacies in the existing pension schemes in the country.

Most worker groups, in the last couple of years, have expressed concerns about the benefits enjoyed by retirees under the two existing pension schemes, the Cap 30 and the Social Security and National Insurance Trust (SSNIT).

To ensure a universal pension scheme for all employees in the country, a Presidential Commission on Pension was set up about five years to examine the country’s pension schemes and recommend sustainable schemes that would ensure retirement income security for Ghanaian workers.


As part of efforts to help disseminate the facts about the new pension schemes to the general public, the Ghana Trade Union Congress (TUC) last Tuesday met journalists in Takoradi to educate them on the new schemes so that they would in turn educate the general public on the advantages of the new schemes.
Rose Kwei, Informal Economy Officer of the TUC, told the journalists that PCP mainly recommended the creation of a new contributory three-tier pension system.


“They comprised two mandatory schemes and a voluntary one with a National Pension Regulatory Authority (NPRA) to regulate and oversee the efficient administration of the composite pension scheme,” she added.
She explained that the first tier is a mandatory basic national social security scheme, which would incorporate an improved system of SSNIT benefits and is mandatory for all employees in both the private and public sectors.


According to her, the second tier pension scheme is mandatory for all employees but privately managed, and designed primarily to give contributors higher lump sum benefits as compared to CAP 30 and SSNIT pension scheme.


Madam Kwei indicated that the third tier voluntary provident fund and personal pension schemes were supported by tax benefit incentives to provide additional funds for workers who wanted to make voluntary contributions to enhance their pension benefits and also for workers in the informal sector.
She mentioned that the current age for one to make contributions was 15 years instead of the previous 20 years.

 
She also disclosed that the survivors benefits calculation period had increased from 12 to 15 years under the first tier basic national social security scheme.


She pointed out that under the second tier pension scheme workers could use their future lump sum pension benefits to secure mortgages, adding “This means that workers can obtain their own houses before retirement by using their pension benefits as collateral.”


To ensure the protection of contributors’ interests, Madam Kwei noted that the National Pension Bill had in-built safeguards which included stringent approval and registration criteria by the Pensions Regulatory Authority, separation of functions of Trustees, Fund Managers and Custodians as well as on-going monitoring among others.


“Trustees licensed by the Authority would be required to take out adequate insurance to indemnify scheme members against any losses of scheme assets caused by malfeasance or misconduct of the trustees or their service providers,” she noted.
From Emmanuel Opoku, Takoradi