…targets 40% pensions coverage by 2026
The National Pensions Regulatory Authority (NPRA) has retrieved GH¢6.2million from employers who have defaulted in payment of their workers’ pension contributions.
About 15 other defaulting companies are being processed for prosecution, for failing to comply with a directive by the authority to either pay their workers’ contributions in full or submit a plan of payment.
NPRA’s Chief Executive Officer, Hayford Atta-Krufi who disclosed this during a media briefing in Accra, said the amount was recovered from 70 percent of 60 defaulting companies between July 2020 and June 2021.
In July 2020, he said, the authority issued notices of intention to take legal action against 60 defaulting employers – out of which about 70 percent of them contacted the NPRA and made good either all of their indebtedness or made partial contributions to cover their employees. Others also submitted payment plans.
“The total amount paid to Corporate Trustees as a result of the prosecutions by NPRA as at the end of June 2021 is GH¢6,242,074, which is quite encouraging,” he said.
Ambitious plan to grow pensions coverage
According to data from the authority, of the over 11 million active work-force in the country, over 9 million of them are found in the informal sector where pensions coverage is at a lowly 3 percent.
To change this narrative, Mr. Atta-Krufi said his outfit has developed a five year – 2022 to 2026 – strategic plan to increase informal pensions coverage to 40 percent. The plan builds on the current one (2017 – 2021) and is expected to reduce old age poverty and increase overall contribution of the sector to the national economy.
The strategic plan will focus on five areas: sustaining credibility of the authority; ensuring market discipline; ensuring market transparency; increasing pension coverage; and ensuring sustainability of the Basic Social Security Scheme – and is to be achieved under the broad theme of ‘A visible NPRA, increasing coverage and growing pension assets for national development’.
Under the plan, Mr. Atta-Krufi expects the pensions regulator’s assets under management to grow to about GH¢50billion from the current GH¢33billion.
“Per the current statistics available to the authority on pension coverage in Ghana, only 3 percent of workers in the informal sector are covered under pension schemes. Therefore, a huge number of workers in the informal sector will not have access to regular income during their retirement.
“This is not good for development of the country. That is why we have set this ambitious target to increasing pension coverage, and with your help and support of Ghanaians we should be able to achieve it,” he added.
Part of the strategy will also see the introduction of a micro-pension policy aimed at growing coverage in the informal sector; closer collaboration with unions and associations as the route to capture more contributors, market activations; and collaboration with telcos to make pensions payment convenient.