Head of Corporate Client Relations at Axis Pensions Trust, Emmanuel Ntreh, has adviced that impending pensioners – those with five or less years to mandatory retirement – should not treat the decision to retire early lightly, but seek expert opinion before coming to a decision.
This, he suggested, is expedient as the decision on when to retire could have significant ramifications not only for the individuals but on their families and the State.
Whilst declining health, migration, prospective business opportunities and the erosion of value as a result of inflation are the most often cited reasons to retire early, evidence suggests that a decent number of individuals who trigger early retirement do so without conducting an impact assessment or seeking expert opinion.
Making his submission on the subject ‘Accessing Your Retirement Benefits’ at the 2020 edition of the Pre-Retirement seminar organized by Axis Pensions Trust, which was hosted virtually this year as a result of the ongoing pandemic, he highlighted how the Pension Right – the right acquired by a contributor as a function of number of months (180 aggregated month) contributed – and expressed in percentage points, grows by an additional 1.125 percent per annum.
Referring to data from the Social Security and National Insurance Trust (SSNIT), Mr. Ntreh showed that the five-year difference between retiring at age 55 and at 60, could affect pension receivable by as much as 67 percent per month in perpetuity.
“It is important that people know that the age they decide to go on retirement has an impact on the amount of pensions received from the first-tier pot, in this case, SSNIT. If an individual decides to trigger the voluntary retirement qualifying condition, the Trust will also apply the age-reduction factor.
“Looking at the data, I’ll humbly advice that if you are not really prepared for retirement, wait and do not be tempted to trigger your voluntary retirement, but hold on until you are 60 years old to apply for your pension. But if the situation seems pressing, do not treat the decision lightly but speak to a professional on the matter,” he said.
He added that contributors approaching retirements should arm themselves with requisite information for accessing their pensions, noting that lack of knowledge on how to begin processing their pension benefits as well as incidents of incomplete or missing records ranking highest among the challenges many of them face.
On his part, General Manager of Axis Pensions, Paa Kofi Ankomah, offered insight into payments made by his firm to contributors. “At the beginning of the year, we expected to pay retirement benefits for 1,854 members of 106 employers from 29 different schemes. As at 31st July 2020, I’m happy to announce that we have successfully processed and paid out GH¢21.9m for 764 retirees from 26 schemes made up of 78 employers. The highest amount we’ve paid so far sits at GH¢600, 000,” he said.
Touching on projections for the upcoming year, he revealed that in 2021, the Trust expects to pay out retirement benefits for an additional 1,200 members.