The People’s Pension Trust, in partnership with Star Microfinance Services Limited, has launched a ‘Life Bonus’ policy, an innovative pension product that provides an embedded funeral insurance cover for its contributors.
The Life Bonus product has been developed to give extra value to the existing ‘Me Daakye’ members who are made up of the tier three informal sector pension scheme.
It entitles the nominated beneficiaries of a deceased member to a sum assured, equivalent to four times the total contribution made by the deceased member during the previous calendar year, in addition to the outstanding balance made up of contributions plus accrued interest in the deceased’s account.
In his speech, Chief Executive Officer of the People’s Pension Trust, Samuel Waterberg said: “Stated beneficiaries and the family of the deceased member are therefore not left to wallow in sorrow as well as be saddled by fund challenges and debt issues. They are assured of giving their dead relative a befitting burial as well as promote and sustain the livelihood of those left behind, that is the next of king or beneficiaries, especially, if they are children of school going age.”
He added that: “Our existing product, that is the ‘Medaakye’, has an insurance solution imbedded into it. Assuming someone saved GHC 500 in 2018, if the person passes in 2019, he or she gets four times the amount, which is GHC 2000. And I’m happy to announce that all our members in the informal sector, will be registered onto this life bonus.”
On his part, Executive Director of Star Microinsurance Services Limited, Kwame Asare Boakye, said the pension regulatory charges in Ghana have opened up the pensions market by including the previously excluded informal sector which covers 80-90% of the working population in Ghana.
He said as part of financial inclusion strategy, Star Microfinance Services Limited deemed it necessary to partner the People’s Pension Trust to create value for its members.
“We believe insurance is all about claims payments and are committed to paying genuine claims. The company has so far paid genuine claims up to GHC950,000 from January 2018 to September, 2018. We believe that, with this partnership, the insurance penetration can be moved from the current 2% to a higher percentage in future by bringing on board more of the mass market onto micro pension scheme”, said Mr. Boakye.
Presenting a speech on behalf of the Minister for Employment and Labour Reations, Ignatius Baffour Awuah, Director in Charge of Special Duties, Dr. Stephen Amponsah commended the partnership between the two parties adding that the collaboration that birthed this innovation is remarkable especially for foraying into a space largely shunned by many.
He said the informal sector forms about 80% of the country’s workforce however, major financial policies that have been formulated and implemented over the years is done without much consideration to the informal sector, resulting in neglect and marginalization for the undoubtedly hardworking sector.
“These workers spend their active years in labor and continue to work throughout their retirement in the hopes of making ends meet even in their old age. Until the introduction and establishment of the contributory three-tier pension scheme in 2006, which allows private corporate trustees to administer pension funds to the informal sector, thus provide adequate pension coverage through the supervision of the National Pensions Regulatory Authority there had been very little attention paid to the sector with regards to pensions.”
Dr. Amponsah added that: “It is a relief and an encouragement that companies like Peoples Pension Trust takes interest in providing pension coverage for the informal sector. It is even more exciting that they have taken the initiative to think outside the box and come up with livelihood enhancement products such as this.”