The National Pensions Regulatory Authority (NPRA) has assured workers due for retirement this year of their benefits under the new 3-Tier Pension Scheme.
This year marks 10 years of the 3-tier pension system’s implementation, which means that the first batch of workers retiring at the age of 60 under the scheme are expected to begin enjoying their benefits.
“Workers who are retiring under the reforms will receive their benefits,” NPRA’s Corporate Affairs Manager, Nana Sifa Twum, told the B&FT.
“The trustees invested the funds wisely and we expect that by now those funds would have yielded dividends; so the official position of Authority is that the benefits will be paid, and the law will not be amended,” he emphasised.
Mr. Twum was reacting to a calls by the Trade Union Congress (TUC) urging government to postpone the final implementation of the three-tier pension scheme – the payment of benefits to the first batch workers retiring under the new law.
Ideally, the TUC wants comprehensive data on pensions which were held in the Temporary Pension Fund and Account (TPFA) and unification pension schemes to be achieved before full implementation of the new system.
“There are various issues about pension that we have not talked about, including data on the pension funds which were held in the TPFA at the central bank, as well as unification of pensions among other issues.” the TUC’s General Secretary Yaw Baah said last December.
“We are therefore calling on government to allow some time, maybe five or seven years, before implementation begins,” he said.
The National Pensions Act (766), passed in 2008, stipulates that all parallel pension schemes be unified and brought under the three-tier pension scheme by January 2016. But despite the law’s existence since 2008, the part that calls for unification has not been implemented.
However, according to the pensions’ regulator, the TUC’s proposal will not hold as it does not intend to amend Act 766 and will go ahead with implementation of the final phase.
Although Mr. Twum failed to answer whether there are funds to pay the retirees, he assured that the industry – and for that matter the regulator – is ready for the first batch of workers retiring at age 60 under the 3-Tier Scheme.
The 3-Tier system
Under the 3-Tier Scheme being implemented by the NPRA, the first and second schemes – made up of the basic national social security scheme and occupational pension scheme respectively – are mandatory.
The third tier is voluntary, made up of provident fund and provisional pension schemes.
Implementation of the reforms, which aim to ensure better retirement income security for all workers – especially those in the informal sector – and a better standard of living for Ghanaians, started in January 2010.
Under Tier-1, workers retiring this year will receive monthly pensions from SSNIT. In addition to this, SSNIT will pay past credit in the form of a lump-sum to workers who were working prior to January 1, 2010.
Meanwhile, Tier-2 will be paid by private Trustees and Tier-3, which is for those who topped-up voluntarily, will also be paid by private trustees.
Per the modalities, the total contribution from the employer and the employee under the first and second tiers is 18.5 percent made up of 13 percent by employer and 5.5 percent by employee, unlike what pertained under the old SSNIT scheme – which was 12.5 percent by employer and 5 percent by employee for a total of 17.5 percent.