People’s Pension Trust (PPT) Ghana Limited has started paying bonuses to pension contributors – a move expected to boost pensions in especially the informal sector.
The company has offered a 10% top-up on the total pension contribution its loyal customers made in the year 2017. The beneficiaries, over a hundred, comprise mostly traders within the Accra Central Business District who have signed on to the PPT Informal Sector Pension Scheme.
This, according to the company is to reward their consistency in making a minimum pension contributiion of GH¢500 in 2017.
Some of the beneficiaries – namely Lydia Okine, an accessories dealer; Frederick Essel, a second-hand clothes dealer; Benjammn Ashitey, a lace fabric dealer, as well as Zakari Ali and Salesi Mohammed, both butchers, and all at the Makola Market in Accra – expressed their joy and gratitude to People’s Pension Trust.
They recounted the several losses they hitherto suffered at the hands of some financial firms, and expressed gratitude to the company for not absconding with their savings but rather topping it up. They praised PPT for taking an interest in their welfare and pledged their loyalty to the company by acting as brand amabssadors.
The initiative was made possible through a partnership involving People’s Pension Trust and two major financial companies based in the Netherlands which focus on creating sustainable value for their stakeholders – ASR and MN – with funds from an employee crowd-funding exercise.
ASR offers insurance products for income protection, travel and leisure, health and pensions; while MN works to secure the financial future of its clientele by way of pension scheme and insurance management.
PPT was selected for this project due to its innovativeness in product and process developmentm, coupled with the premium it places on financial education and customer experience in the delivery of pensions services.
PPT describes the initiative as a reaffirmation of its commitment to government’s financial inclusion agenda by boosting pensions in the informal sector, and by extension the pensions industry at large.
PPT’s CEO, Samuel Waterberg, stressed the importance of retirement planning as a tool for financial inclusion, indicating that: “Though pensions and retirement savings plans are important to individual welfare and stability of the economy, it is the least-understood financial product”.
According to him, financial education on the long-term value of pensions has thus become crucial as individuals are not saving sufficiently to guarantee adequate retirement income. He also reiterated PPT’s commitment to eliminating old-age poverty by providing 500,000 informal sector workers with tailor-made pension products by 2022.
The Pension Reform
Informal sector workers constitute about 80% of the Ghanaian workforce, but had been denied protection against the perils of old-age until enactment of the National Pensions Act 2008 (Act 766).
Even in the wake of the pension reform, particpation by especially informal sector workers has been largely insubstantial due to a number of factors: such as low knowledge levels on pensions, mistrust as a result of fraud by some financial institutions, long-term nature of pension schemes etc.
It is against this backdrop that PPT has since 2016 been spearheading the campiagn to boost informal sector pensions in Ghana, and thus ensure financial cushioning for such persons upon retirement.