The government has transferred an amount of GH¢1.3 billion of the second tier pension contributions of public sector workers which were held in a temporary account into custodian accounts of five registered public sector pension schemes.
The five are the Ghana Education Occupational Pension Scheme, Judiciary Services Occupational Pension Scheme, Hedge Master Trust Occupational Pension Scheme and the Public Sector Workers Employees’ Pension Scheme.
The move is to facilitate the smooth payment of contributions of second tier pensioners who wish to withdraw their contributions from January 2020, as permitted under the Pensions Law.
The Minister of Employment and Labour Relations, Mr Ignatius Baffour Awuah, who announced this when he took his turn at the Meet-the-Press series in Accra yesterday, said the second tier pension contributions were held in a Temporary Pensions Fund Account (TPFA).
Following the passage of the National Pensions Act, 2008 (Act 766) which took effect in 2010, a three-tier pension scheme was introduced. The first and second tiers are mandatory, while the third is voluntary.
Act 766 also makes provisions for employers to make direct contributions of 13 per cent for and on behalf of their employees, while employees contribute 5.5 per cent of their basic salaries, totalling 18.5 per cent of the basic salaries as contribution to the scheme.
Mr Baffour Awuah said the government was also supporting the development of a comprehensive data to ensure the smooth disbursement of the funds to contributors.
The data will facilitate the matching of the funds of contributors to make way for the payment of the second tier pension funds whose maturity starts from next year.
During the 2019 May Day celebration, which was on the theme: “Sustainable pensions for all; the role of social partners,” President Nana Addo Dankwa Akufo-Addo gave a directive for the resolution of all pensions and pension-related matters raised by organised labour.
Mr Baffour Awuah said stakeholder discussions were also ongoing to establish specific pension schemes for various units within the informal economy.
Some of the groups, he said, included farmers, fishermen, market women and traders, drivers, spare parts dealers and artisans comprising masons, welders, tailors and hairdressers.
Unemployment rate in Ghana, the minister said, had reduced from 11.9 per cent in 2015 to 7.1 per cent in 2019, according to the Ghana Living Standards Survey (GLSS) conducted in 2015 and in 2019.
He attributed the low unemployment rate to the government’s flagship policies, programmes and interventions which put job creation at the centre of national development.
“These interventions resulted in the creation of 611,397 new jobs in the formal sector, including 343,458 jobs in ministries, departments and agencies (MDAs) and the rest in the formal private sector.
Planting for Food and Jobs (PFJ) programme, according to the minister, provided 1,593,000 people with jobs.
According to him, there had been a relatively stable and peaceful industrial atmosphere for the past two years, for which he commended the leadership of labour unions, employers and workers for their tolerance in handling labour disputes.
The pension reform in Ghana was in response to agitations from organised labour and pensioners on the inequalities in retirement benefits among public sector workers, as well as inefficiencies in the then existing system, where the Social Security and National Insurance Trust (SSNIT) was the sole quasi-state pension manager.
Under the Act, the second pension scheme is to be privately managed, but since the National Pensions Regulatory Authority (NPRA) was yet to license a private fund manager, the government held the contributions in a temporary account with the Bank of Ghana (BoG).
In line with the provisions of the pensions law,however, the government was expected to transfer the funds to the registered independent schemes’ accounts 90 days after their registration and licensing, but since 2010, public sector workers have been waiting for this to happen.