Cabinet has given approval for a roadmap to be developed that unifies all pension schemes in the country, Deputy-Minister for Employment and Labour Relations, Bright Wireko Brobbey, has disclosed.
The unification is, however, expected to be completed by 2021, since it involves a wider consultation before it fully takes off.
The National Pensions Act (766), passed in 2008, stipulates that all parallel pension schemes be unified and brought under the three-tier pension scheme.
Despite the law’s existence since 2008, its provisions have not been implemented.
The process of unification is one of the National Pensions Regulatory Authority’s (NPRA) mandates to ensure that the fragmented pension regimes are harmonised.
“We ought to take our time and look at the institutions involved. Once Cabinet has given the approval, it is now left with NPRA and the committee working on it to really put in place measures; and this involves meeting stakeholders.
“It is not something that can be done overnight, and so month-by-month some kind of engagements are going on – for example, parliament has some form of pension regime and we have to engage parliament and others like the Audit Service, so all these institutions must be engaged. Hopefully, we should look at between now and 2021; we should have a solid kind of unification,” he told B&FT in an interview when accompanying officials of the NPRA to appear before the Public Accounts Committee of Parliament on Monday.
He also explained that the main benefit or advantage of the unification is to ensure sustainability of the pension regimes.
“At the moment, there are some categories of staff who do not contribute to their pensions but are being paid. These are problematic. If you go on doing that, actuarial studies from SSNIT and NPRA have shown that the pension regime cannot be sustained as a country.”
CEO of NPRA, Hayford Attah Krufi, also indicated that the law mandates NPRA to ensure that everyone under the formal sector comes under the Three-Tier scheme, which is what the unification process is about.
He added that within the roadmap, NPRA has to engage institutions that fall under the non-contributory system.
Under the CAP30, which was set up in 1952, civil servants were not supposed to contribute – as well as the Armed Forces. The Ghana Prisons Service and other security agencies also do not contribute.
“To migrate them, you need to engage them to get their understanding and buy-in before the process can be completed.”
He also disclosed that the NPRA has been given the mandate to prosecute institutions which do not pay its pensions, but it is yet to begin prosecutions since they are in the preparation stage.
Section 213 of the National Pensions Act as amended states that upon the Act coming into force, all existing parallel pension schemes – such as the colonial CAP30 and University superannuation schemes among others – should be unified under the three-tier scheme within a four-year period, except that of the Armed Forces.
The CAP30 pension scheme, which many agree has outlived its usefulness, is a non-contributory pension scheme instituted in 1952 under the Pensions Ordinance, No 42 of Chapter 30, for civil servants in the service before 1972.