New pensions investment guidelines likely to put private pension funds at unnecessary risks


Investment guidelines are both consumer protection and risk management tools that put checks and balances on the players entrusted to invest the “sweat” retirement capital of workers for safe but fair returns. They are also used to direct patient pensions capital into productive sectors of the economy, so it acts as a balancing tool between consumer protection and impacting on the economy.

With private pension funds having grown from GHS6.79bn in 2016 to GHS22bn in 2020, new investment guidelines have been gazetted and introduced in the private pensions industry by the National Pensions Regulatory Authority (NPRA) with the intent to have pensions impact more on the economy. This is the third guideline that has been introduced since the beginning of private pension regime in 2010.

The 2011 guideline was very conservative with the type of asset classes and rightfully so. The 2017 guideline introduced Bank Securities, Infrastructure Bonds, Cocoa Bonds, Private Equity Funds, Unit Trusts, Mutual Funds and Exchange Traded Funds, that hitherto did not exist, to essentially expand the assets classes and to impact on the economy. The 2020 guideline has also added more products, ie. Private Debt Funds, Repurchase Agreements, Direct Property Investments, Project Finance, Green Bonds and also introduced a mandatory Constituent Fund, making a wide range of investment and securities products available to the Fund Managers.

Reading from the new guidelines, it will be observed that whilst more high risk products have been introduced that will benefit the development of the securities market and investment banking in general, certain limits and conditions that put checks on the service providers have been relaxed or made flexible, with little or no recourse to them once they are working within a guideline which the Regulator has approved. Also it gives an impression that the new guidelines were prepared more with what players especially Fund Managers can make from the funds and its impact on the stock exchange, investment banking landscape and the economy rather than the protection of consumers for a safe return. It took sixteen years to review the 2011 guideline but in just three years the 2017 has been reviewed. Have we allowed the 2017 guideline enough time to exhaust its impact and its usefulness? What structural changes have all of a sudden happened in the economy and investment market that will allow the funds to take advantage of, for better returns?

The paramount interest for private pension funds is adequate retirement income for the worker through safe and fair returns and not just to collect contributions from workers to help develop either the stock market, investment banking products and support Governments fiscal policy and projects. If the stock market is doing well, investment products and instruments are safe with fair returns and Government projects have good cash flows, private pension funds will naturally flow into them to support the economy. It is neither a social fund or free money just because the funds can be available for a relatively long term.

Let’s go through the key changes and additions made in the new investment guidelines and give an opinion.


A Risk Investment Management Committee (IRMC) has formally been introduced and this is laudable. The role of the IRMC is to determine the acceptable risk appetite of the scheme by putting in place the needed risk tolerance limits and is a good corporate governance tool. The challenge is that it has been made mandatory for all schemes.

In my opinion, it should have been limited to the Corporate Trustee as a corporate entity at their Board level and only standalone Employer Sponsored Schemes. Employer Sponsored Schemes are big enough to be self-managed and are not under the control of the Board of that particular employer, hence must have an IRMC. All other schemes that are registered by the Corporate Trustees in terms of corporate governance are under the direction and control of the Board of the Corporate Trustee, hence the IRMC at Board level would have been the appropriate body to be responsible for all investment risk management for the registered schemes.  Why must every registered schemes have an IRMC?

The individual schemes registered by Corporate Trustees are not likely to afford the type of financial risk management expertise needed for each scheme. Who is going to be responsible for the cost of such committees since the skillset will not come cheap? Is it also likely that individual schemes might not even generate enough fee income to afford such a committee? Should the IRMC be at the board level of the Corporate Trustee, the IRMC would be taking care of all the schemes and the fees will have to be borne from the resources of the Trustee and not the schemes? This should be reviewed again to limit it to only the Board level of Corporate Trustees and Employer Sponsored Schemes to avoid practical implementation challenges and unnecessary cost to the schemes.

The Corporate Trustees must bear in mind that the fiduciary relationship is between them and the contributors and not the Fund Managers hence as it stands, the IRMC must at the scheme level put in place investment policies that will put checks on the Fund Managers who want to take advantage of the flexibilities in the new guidelines. At the end of the day, as Trustees, you are on your own should anything go wrong.


  • GoG Securities

This has been increased from 60% to 75%. The reason being that there are limited investment products and pension funds have willingly been seeking grants of waivers from the Authority to exceed the GoG maximum allocation. Whether or not the request to exceed GoG maximum allocation were willingly made by the Corporate Trustees or by compulsion is another issue. Once the NPRA was in 2017 made to report to the Ministry of Finance as a second Ministry aside the Ministry of Employment and Labour Relations, it was not far-fetched to realise that the private pension funds were going to be targeted as a source of balancing the government’s debt financing and re-financing needs.

NPRA reporting to two ministries is a governance challenge more so when pension is more of a labour relations issue from the perspective of protecting consumers to secure fair and safe returns whilst impacting on the economy than government financing but this discussion which is of course debatable would be left for another day.  NPRA has the power to grant waivers but for transparency, NPRA should be able to publish all the schemes, who ask for waivers, and by how much they exceed their limits for public consumption.

  • Local Government and Statutory Agency Securities

This involves Municipal and Local Government Bonds, Cocoa Bonds/Bills as well as Statutory Agency Bonds/Bills. and has been increased from 15% to 25% with the limit of maximum of 5% per issuer removed. Adding this to the GoG securities of 75 % technically gives government a 100% access to the private pensions funds with no per issue limits. Either it is to ratify the difficulty in rebalancing the portfolios of those who asked to exceed the limits, since waivers cannot be in perpetuity or there is an unseen influence.

If all funds go to government then we have created what the old SSNIT used to be, where governments have used pension funds as a lender of last resort for both liquidity management and political social projects that have no economic returns. If governments can technically have access to 100% of the private pension funds which can also be used to refinance existing debts with no underlying economic projects, then how does it impact on the economy?

Private pension funds are not welfare funds for social interventions but are pure capitalist funds that require economic returns and cash flows. They can be used to build a three lane highway road from Accra to Kumasi but need to be tolled and collections made by the investors over a period to make economic returns with steady cash flows.

Governments being able to have 100% of the funds is a concentration risk no matter how it is seen since government policy can impact negatively on these funds. A Government in distress can exchange original securities for new ones with less favourable terms and here, the scheme either accepts the lower returns or takes a “haircut”. This actually happened to some schemes that had investment in some of the banks that recently collapsed. You better cut your losses than have 100% of zero.


New asset classes of Green Bonds and Asset Backed Securities (ABS) have been introduced. The percentage of value per issuer as well as percentage of Asset Under Management (AUM) per issue have been increased from 5% to 10%. With total AUM increasing from GHS6.76bn in 2016 to GHS22bn in 2020, increasing the limits unnecessarily puts the funds more at risk. The old limits because of the astronomical growth in AUM, would still have increased the values into corporate debt securities of bonds, debentures etc. With just twelve years of private pensions and retirement payments just starting in 2020, it is too early to double the limits since we are still in the conservative phase of safe returns. In any case, only about 4% of the allocated limit of 35% was utilized as at 2020 so there was room for utilization. Is the investment guideline a securities product development tool for Fund Managers or a pension consumer protection tool?

  • Asset Backed Securities

Asset Backed Securities (ABS) have been added to Mortgage Backed securities (MBS). ABS are created by pooling together non-mortgage assets, such as auto loans and credit card receivables. What are the acceptable assets and why do we want to do this at this time? A clear opportunity for rogue Fund Managers, banks or other finance houses to off load existing toxic illiquid assets, hardcore loans or receivables to the pensions funds to clean their books if not monitored. Do we have the legal framework for ABS? At least for MBS we have.

  • Green Bonds

These are bonds that are issued for which the underlying projects must have positive environmental and climate impacts. They have been given 5% allocation that does not count towards the 35% maximum of corporate debts. This will nudge investments into these bonds.

There is currently no official overarching regulation that defines a green bond and the principles that do exist are voluntary rather than legally binding. In practice, many issuers tend to follow the four core components of Green Bond Principles (GBP) of the use of the proceeds, process of the Project Assessment and Selection, Management of the Proceeds and lastly its Reporting. It is recommended that the Regulator, NPRA, must pre-approve any such bonds making sure that the four core components have been met before pension funds are made to invest in them. The reason being that they do not count towards the mandatory limits allocated to the asset class and they can be abused.


The allocations remained the same at 20% which still makes more funds available due to the astronomical growth in the AUM over the past years. The challenge is the per issuer limit which was a maximum of 10% of shareholder funds of the corporate entity has been changed to 10% of the market capitalization. The two are different with the former more conservative allowing the pension funds to limit and share the risk with the other shareholders. Using market capitalization increases value at risk to the pension funds since they can be either undervalued or overvalued by the market players to affect the price-to-book ratio. Why do we want to complicate issues? It gives a feeling we just want to develop the securities market with the intended transaction fees going to the Fund Managers without thinking of risks to the contributors’ funds. Meanwhile only about 3% of the allocated 20% was utilized at the end of 2020. Safe and fair returns is the cardinal rule in this early stages of our private pensions space.


Banks impact more on the private sector economy but the limits were left unchnaged. If they have more patient funds it will impact on more people by way of ability to give relatively long term loans. In any case, the funds have grown so in terms of value, more funds will be available to banks anyway. Perhaps the recent shocks in the banking industry has put the Regulator on caution but still one of the safest aside government securities.

The one week “cooling off” period for matured investments to be reinvested with the same bank after a rollover has been expunged. Now the proceeds must be paid to the custodian banks with no rollover allowed. Was this a mistake? The onus is now with the Corporate Trustees to move the funds around within the banking system. A reduction of the “cooling off” period would have been preferable at this time.

  • Repurchase Agreements

Repurchase Agreements (REPOS) have been added which will be helpful for the banks to raise short term funds. The bank can sell securities to the pension fund and later buy them back at an agreed price. The type of repo and security should have been specified even if it seems obvious. Maturity periods can range from overnight to a year and some may be open hence limits should have been placed on the type of maturity periods that is permissible. The investment guideline is a financial risk management tool and not a product development tool hence any risks need to be mitigated, unless there are no inherent risks to be mitigated in repos to protect the fund.

More importantly, REPOS operate mainly within the lending and borrowing segment of the money market and so therefore, it is not too clear if allowing pensions in the REPOS markets breaches sections 178(2)(c)(d) of the National Pensions Act, 2008 (Act 766) which states that “a privately managed pension fund shall not make short sales” and “a privately managed pension fund shall not borrow for investment purposes” respectively.


An alternative investment (AI) is a financial asset that does not fall into traditional or the conventional investment asset classes of equity/income or money market categories. Comparably, AIs are complex, not heavily regulated and come with higher degree of risk. They come with high fee structures as well and require a longer investment period for any material gains to be realized.

The allocation to AI has been increased from 15% to 25%. The more one reads the new guidelines the more one notices the influence of Fund Managers and unseen hands in the crafting of this guideline and for what purpose?

In the old guideline, this used to be specifically limited to Real Estate Investment Trusts (REIT), Private Equity Funds (PEF) and External Investment in Securities. The new guideline has added categories of Project Finance, Private Debt and Direct Property Investments which increases the associated risks and likely to benefit private individuals and their businesses. NPRA must keep an eye on the beneficial owners of the businesses where these funds are invested to curb conflict of interest transactions and related party transactions between the Corporate Trustees, Fund Managers and the third parties.

  • Project Finance

This has been defined by the guideline as a funding/financing of infrastructure, industrial projects and public services using a non-recourse or limited recourse financial structure. Non-recourse projects will entitle the scheme to the profits of the project being financed and no other assets of the borrower can be seized upon default. They normally have distant repayment prospects and uncertain returns.

By the guidelines, all Project finance must have Government or Government Agency participation. Under normal circumstances this should give some comfort but with the recent political climate where a change in government brings most government related projects to a halt even if temporary, it rather poses a risk to the pension funds more so when it is on non-recourse basis.

Financing of industrial projects can be complex especially once Government is involved with the apparent political risk. Once not completed the pension fund is stuck with a “white elephant”. Since the only collateral is the project, once started there is the likelihood of cost overruns which the scheme has no choice but to keep on investing more funds till it is completed. It is not easy cutting your losses or disposing off such projects that may be specialised in nature with no alternative uses. For example, building a new stadium, who are you going to sell it to?

The board of Corporate Trustees and executives together with the Fund Managers who advised and decided to venture into such non-recourse investments that fail must be prosecuted for causing financial loss to the scheme. If it goes well good luck. How is the guideline protecting the pensions funds with a non-recourse financing arrangement? With the high political risk in such government related industrial or public services projects it should be expected that it will be with recourse to the Government. This is obviously an arrangement for Governments to avoid contingent liabilities but at whose cost? Is it the pension funds?

If the borrowers believe in what they want the financing for, they must, at least till the project is completed be with recourse to them. Once the cash flows have been properly ascertained, to be in control of the project risk management, avoid cost overruns possibly through corruption and eliminate political risk, the private pension funds might as well take the Government out and finance these projects on a Build-Operate-Transfer basis, through Special Purpose Vehicles (SPVs). We do not want another old SSNIT type of arrangements where Governments directed pension funds into projects they took credit for but the liability solely falling on SSNIT at no economic value. The challenge is, do the Corporate Trustees have the expertise in project finance evaluation and risk management?

  • Private Debt Funds

These are investment pools that extend debt to privately owned companies as a form of debt financing or source of capital. The beneficial owners of these companies must be known otherwise, private pension funds will be used by some rogue Fund Managers and Corporate Trustees to finance their companies and that of family and friends. There is the possibility of replacing their existing stakes in distressed companies with the pension funds and walk away as long as they are within the NPRA guidelines.

If we want pension funds to support private businesses, which is acceptable, the risk will be minimized if the money is channeled through the banks as investment, for the banks to on lend to the businesses since they have the expertise to assess the credit risk. The risk can be transferred to the banks by way of direct investment but for syndicated loans. At the end of the day the pension fund is not directly taking up the risk of a company but would get the funds back from the bank with a fixed known return even if the business is not doing well due to economic downturns. Private Debt Funds may be introduced later but not at this time when COVID has added another layer of risk to businesses and made the economy unpredictable. Private pension funds are not social or “stimulus” funds.

Here again, the board of Corporate Trustees and executives together with the Fund Managers who advised and decided to venture into such investments must be prosecuted for causing financial loss to the scheme if there is a default, if the risk could have been avoided or there exist traces of conflict of interest deals.

  • Direct Property Investment

This is defined by the guideline as real estate property purchased or developed through direct investment by a scheme. Unlike REITs, where the schemes invest in real estate without owning or managing the properties, this is directly buying and owning of residential and commercial properties such as office buildings, industrial parks, retail complexes and shopping malls which must be for economic returns.

Somehow the guidelines, requires that all direct investments in Real Estates to have Government or Government Agency’s participation which should ordinarily give some comfort. Are Governments into economic real estate development? I just hope we are not looking at affordable housing social schemes by Governments. In as much as private pension funds are to impact the economy they are not welfare or social funds.

The caution is not to allow pension funds to be used to off load locked up funds of real estate developers in properties they are not able to get the needed rental incomes or buyers or no more interested in. Just satisfying the conditions laid down in the guidelines to transfer risk to the private pension funds should be a concern eg. releasing equity in some non-economic SSNIT projects for liquidity purposes.

The NPRA now has dual reporting lines to the Ministry of Finance and Ministry of Employment and Labour Relations, each with different motives. Between the two Ministries who wins the battle of interplay between protecting consumers and public finance? Do the Corporate Trustees and the Regulator have the expertise to evaluate and take such decisions or approve such direct property investments? Are we ready for this in just twelve years of introducing private pensions?

To deal with this, the Corporate Trustees may need to set up a Special Purpose Vehicle (SPV) with the expertise, pool funds together to share the risk in venturing into this.


Under Regulation 22 of L.I. 1990, a registered scheme may consist of a single constituent fund or two or more constituent funds which shall be approved by the Authority. Once a scheme decides to have multiple constituent funds, each fund is to have different investment policies.

Now the new guideline has made it mandatory for tier 2 schemes to use the Constituent Fund Structure on the basis of age differentials with members being elected into particular age brackets as follows:

Constituent     Funds   for Tier 2 Schemes shall  comprise:

Type of Fund Age Bracket
Fund   1 –  Moderately Aggressive Portfolio Default –  15 to 44  years
Fund  2 – Moderately Conservative Portfolio Default –  45  to 54 years
Fund   3 – Conservative Portfolio Default –  55  to 60  years
Fund   4 – Aggressive Portfolio By formal request


There are both legal and operational challenges with the above mandatory requirement. Legally, the law makes it optional for the Corporate Trustees to make that choice but the guideline is making it mandatory. This is an issue for the Corporate Trustees and as they say what was the “spirit” of the framers of the law.

Operationally, investment decision that will require such “immunization or liability matching strategies” will depend on the risk profile of the members of the Corporate Trustee or the scheme as well as the value of assets under management, but the guideline is making it mandatory. If this is the case, then the expected minimum bench mark returns should have been indicated for each category to protect the consumer. If that cannot be done, then Constituent Funds should not have been made mandatory.

This will only create new Constituent Fund products by Fund Managers where the basket of assets being invested in cannot be questioned by the Corporate Trustees leaving pension funds in the hands of maverick Fund Managers with little room for the Corporate Trustees to rebalance their portfolios. Fund 4 which is the “Aggressive Portfolio” for example is by formal request from a scheme member. Also the rules in paragraph 106 of the guideline allows the contributor with formal application to the Trustee, to switch from one Fund Type to another within a given scheme, once in twelve (12) months without paying fees, subject to exceptions when 55 years.

How financially sophisticated are the contributors to take such decisions? Contributors by this arrangement will need independent financial advice to be able to take such decisions and Corporate Trustees must insist on that before accepting such an election. Once a member makes that election, what will be the role of the Corporate Trustee towards the member? Does it change from a trust relationship to financial advisory?

Are we trying to move to the American type of Individual Retirement Accounts (IRA) where the member is responsible for her own investment decisions and must rely on financial advice from licensed third parties? In Ghana, Corporate Trustees are not licensed to give financial investment advice hence this falls back to the Fund Managers. Someone must owe a fiduciary duty to the member who is advised to elect to Fund 4 or switch between the Constituent Funds and must be able to be sued for wrong advice. I foresee Fund Managers now directly engaging pension fund contributors, advising them to switch funds, attempting to get powers of attorney from such contributors who opt to switch funds to manage their account for them for a fee. What a complex arrangement? Now between the Corporate Trustee and the Fund Manager who becomes the principal and agent?

Obviously those earning high salaries are in the older age brackets and would have invested for a longer period so most likely to have larger constituent AUMs to attract relatively better rates for the younger age group to be able to benefit from the sort of rates the older group can attract. The younger ones in the age bracket of 15 to 44 years are being forced to belong to Fund 1, which will most likely have instruments with longer dated maturities and more of equities. This will allow for Governments to borrow for longer terms and it will boost the stock market but at whose expense? On the Government side, the impact can only be felt if the funds are used in productive sectors with good cash flows and not to just re-finance existing debt. On the stock market, where are the good stocks? They seem to be in the banking, telecommunication and oil industries? How many are Ghanaian owned?  Do we just want to give money to Governments for longer periods and support the stock market for the sake of it?

If the Regulator wants to nudge the industry towards Constituent Funds, then the best it can do is to just indicate the age brackets as done for the schemes who want to have such strategies. Even that the actual age brackets will differ from scheme to scheme and I believe it is for this reason the L.I 1990 made it optional instead of mandatory as a financial risk management tool. What if a scheme has only one member between the age bracket of 15-44 years contributing only GHS200 a month? What financial instruments in Fund 1 can deal with this? Buy shares?

The three-tier pension scheme is just about twelve years which is still infant when it comes to pensions, with the decumulation period having just started in 2020. It will take some good data analytics and financial risk management to make constituent funds mandatory and must be based on some compelling identified risks in the present system.

What will be the motivation or compelling reason for the mandatory introduction of Constituent Funds and the associated complications for contributors with little or no financial sophistication making their own investment choices? It is not surprising that the Working Group recommended a transition period of 12 months for its Implementation.

Does the Regulator want to take responsibility for non-performance of investment portfolios because the Corporate Trustees have been put into strait jackets? What is the role of the IRMC then? What risk are they supposed to be managing with the mandatory Constituent Funds? All that Corporate Trustees have to do now is to profile their clients to fit the pre-determined Constituent Funds and there is no risk appetite to be determined since Constituent Funds are in themselves risk appetite tools. The contributor has been given the power to make an election between the Constituent Funds. Based on what information will the contributor do that? Whose responsibility is it to inform the member of poor performance? How financially sophisticated are the contributors to do that?

In any case as it stands now, I humbly request the Regulator to publish the Assets Under Management (AUM) of all the trustees, the annualized rates of return of the schemes as well as the performance of the Constituent Funds of all the schemes, for the contributors to be able to make informed decisions as to which Constituent Fund to invest in or Trustee to engage.  The contributors need perfect knowledge to take decisions as to which Trustee to use so they can take advantage of the porting “window” in the law.

My recommendation, however, is to scrap it for now and keep it as an option in the” spirit” of the framers of L.I. 1990 as a portfolio risk management immunization tool for schemes. As the saying goes “if you show the people the way and prescribe how they should get there, then you should be made responsible for the outcome”. The Regulator will be blamed by the Corporate Trustees and Fund Managers for any poor performance and attribute it to their hands having been tied with the Constituent Funds.


The previous 2017 guideline already had the tendency to allow pension funds impact on the economy. It introduced Bank Securities, Infrastructure Bonds, Cocoa Bonds, Private Equity Funds, Unit Trusts, Mutual Funds and Exchange Traded Funds, that hitherto did not exist but specific limits were put in place to avoid concentration risk even with Government of Ghana Securities and to mitigate inherent risks in those new financial products. Consumer protection as well as safe and fair returns was paramount.

The table below shows the asset allocation as at December 2020

Asset Class Percentage of AUM Allocated(Tier 2 & 3) Limits Comment
GoG Securities 65.55% 60% Exceeded. Limit now increased to 75%
Local Government and Statutory Agency Bonds 14.54% 15% Almost Utilized. Limit now increased to 25%
Corporate Debt Securities 3.93% 35% Under Utilized. Limit of 35% maintained.
Bank Securities  and Other Market Securities 6.95% 35% Under Utilized. Limit of 35% maintained.
Collective Investment Schemes 2.06% 15% Under Utilized. Limit of 15% maintained.
Ordinary Shares/Non-Redeemable Preference Shares 2.95% 20% Under Utilized. Limit of 20% maintained
Alternative Investments 1.03 15% Under Utilized. Limit increased to 25%

Source: NPRA 2020 Annual Report

From the table, with Bank Securities being as low as 6.95% of AUM, it is possible some Corporate Trustees will not have the liquidity to pay off maturing retirement benefits because they have over exposed themselves to long term Government Securities, unless of course the contributions and the coupon being received are enough to meet maturing benefit payments. Why should GoG securities be exceeded when there is a lot of room in Bank Securities and other Money Market Securities? The government is competing with the private sector which we say should be the engine of growth.

The listing of the asset classes has been arranged in order of low risk to high risk. Alternative Investments which is the highest of risk and has less regulation was the least utilized yet the limit has been increased to 25%. What is motivating this?

A critical statement under “temporary violations” in the old guideline which was to put a check on Corporate Trustees and the Fund Managers in the case of a temporary violation of the assets allocation limits has been expunged from the new one. It said “pending the rebalancing no further purchases of securities within the relevant asset class shall be made except under long term Government securities where additional securities ought to be purchased”. The import of this was, if you violate the limits only do safe long term Government securities whilst rebalancing the portfolio within a given 60 days’ window. Why has this been removed to give the service providers a field day? Even in the banking sector if a bank violates the capital adequacy ratio, the ability to lend is curtailed.

I get the feeling this new guideline had a lot of influence or lobbying from the Fund Managers. They have been able to remove certain recourse or risks to themselves, put in flexibility in using the funds, introduced their investment products to use private pension funds as a source of funding that hitherto had no funding source either due to the inherent higher risks or other reasons.


Yes, private pension funds must impact the economy as it has in other jurisdictions but in those jurisdictions the laws punish those who abuse the funds and projects are undertaken with little or no political risks. The shopping malls, office complexes, road and railway networks that we see in those jurisdictions have economic returns and cash flows.

There is a difference between pensions funds seeing an investment opportunity to make good returns, thereby undertaking those projects that go to impact the economy and a situation where Governments wanting to provide a facility, uses pension funds. The former is for private pensions funds (tier 2 and 3) and the latter for state or public pension funds like SSNIT (Tier 1) which are solidarity funds and for which the residual pension risk falls on the Government anyway, hence the Ministry of Finance may have a reason to fall on SSNIT (Tier 1) for such financing gabs. Under Tier 1, one gets a defined benefit, so no need to worry about how the funds are used as long as the benefits are paid but under Tiers 2 &3, which is a defined contribution, meaning it depends on how much one has contributed and how the investment is performing requires an investment guideline to protect the consumer from rogue service providers.

Once the NPRA was made to report to the Ministry of Finance, it was obvious there was an eye on private pension funds and we should not use guidelines to allow Governments access to the funds as was the case with SSNIT funds under the old pensions regime or just to develop sectors that fall under the Ministry. Corporate Trustees, the decision makers, and Fund Managers, the advisors, should be severally punished should they undertake projects with no economic returns and inflated costs that may go to benefit the players but negatively affect the schemes. Safe and fair returns is the goal of the Regulator, NPRA, but I have a feeling they are helpless, being torn between two Ministries. It does not take rocket science to know which of the two Ministries is more powerful and setting the agenda.

Retirement benefit payments just started in 2020, let us build the confidence of the contributors in the fund as a solution to their retirement income with investment products that give safe and fair returns in the short run whilst developing the necessary expertise and legal framework to make use of the funds in impacting the economy. It is early days yet to want to use the private pension funds the way we going with the new guidelines. If the present contributors lose confidence in the quantum of benefit payment, tension and politics will set in to create so much noise in the private pensions space. The goose that is supposed to have laid the golden egg will be killed. Why the rush? Remember there is another generation after us.

The author is a Chartered Banker, holds an LLB, a Post Graduate Diploma in Financial Management (ACCA) and was the former CEO of The National Pensions Regulatory Authority (NPRA), (Email: [email protected])

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