DR JOHN Ofori Tenkorang, Director General of the Social Security & National Insurance Trust (SSNIT), has expressed worry about the low salaries received by most Ghanaian workers who contribute to the scheme since that is what determines the amount they will receive in pensions.
Speaking at a pensions dialogue organised yesterday in Accra by the Institute for Fiscal Studies (IFS), an economic think tank, the SSNIT boss said approximately 25 per cent of workers were currently contributing to the scheme on a salary of GH¢400 or less, which meant also that approximately 25 per cent of pensioners earned a monthly pension of GH¢400 or less.
He also said approximately 50 per cent were contributing on a salary of GH¢1,000 or less which meant approximately 50 per cent of pensioners earned a monthly pension of GH¢600 or less.
Again, he said approximately 71 per cent were contributing on a salary of GH¢1,800 or less adding that “approximately 78 per cent of pensioners earn a monthly pension of GH¢1,000 or less. Approximately 4 per cent are contributing on a salary of GH¢5,000 or more. Approximately 1 per cent of pensioners earn a monthly pension of GH¢5,000 or more.”
He, however, said the Trust subsidized pensions for pensioners whose salaries were woefully low when they were in active service and that that made the lowest paid pensioner earn more than the lowest paid worker in active service.
Daniel Aidoo Mensah – Research Fellow, IFS, speaking on the topic: “Pension Reform in Ghana: Rationale for the New Three-Tier Pension system, Implementation Challenges and the Way Forward”, mentioned some challenges confronting Ghana’s pensions sector. Some of these included what he termed initial false start – the perceived lack of political will to facilitate the implementation of the new pension scheme; inadequate funding support and lack of needed seed fund for the NPRA for full implementation of the Pensions Act; the instability in the leadership of the NPRA – 6 CEO’s within 8 years with an average tenure of 16 months; and adverse press reports on the work of the NPRA, which has led to loss of public confidence and created credibility problems.
He also mentioned the initial uncertainty about the commencement of the full implementation, wrongful interpretation of some provisions in the pensions law, registration of pension fund custodians contrary to section 158 of Act 766, lack of resources for massive education of the millions in the informal sector, lack of appropriate regulations and guidelines for the operation of informal sector schemes, absence of effective contribution collection systems adaptable to these informal wage earners, and delays in transferring funds from the TPFA into individual accounts took about seven years (2010 -2017) contrary to section 218(4) of the Pensions Act.
Among other things, he recommended that pension issues must be placed on the front burner of the national agenda and be given the needed financial and material support and must also be devoid of any political interference.
He also touched on phasing out the Cap 30 scheme quickly to eliminate the inequities that presently existed as recommended by the Pensions Commission and stipulated in the new pensions law (Pensions Act 766).
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