Prioritise pension issues, stakeholders urge government

Accra, July 26, GNA - Stakeholders at the Annual Pension Industry Conference, have called on government to place pensions at the forefront of national issues devoid of political interferences.

They further advised the Government to ensure that funds meant for the National Pensions Regulatory Authority (NPRA), were applied solely for what they were earmarked for, to enable the regulator to effectively execute its mandate.

There were also recommendations from a panel discussion, requesting the government to give maximum tax holidays to informal sector workers; redefine pensionable salaries of formal sector contributors to include some allowances, and to consider the development of regulations and guidelines for the informal sector to enhance their enrollment onto the new pension scheme,.

They further called for the provision of adequate resources to enable the NPRA to undertake awareness creation on pensions and their benefits, to enhance the enrollment of more informal sector workers onto the Third Tier Pension Scheme.

The virtual Conference, which was on the theme: “Achieving Adequacy through Effective Management and Development of Pensions,” was organised by Penguard Business Solutions and Consulting, a pensions consulting and business solutions firm, in collaboration with Ghana Talks Business, an online business content platform.

Over 100 participants including private and public sector players from financial services, the NPRA, Securities and Exchange Commission, Government representatives, Corporate Trustees of various pension schemes, Administrators, Contributors, Sponsors, Fund Managers, Custodians, Board of Trustee representatives, and Labour Unions, joined the conference to discuss topics such as: Adequacy of pensions for the Ghanaian workforce-10 years into the 3-Tier Scheme, Developing the Economy through pensions, Riding on Technology to drive pension in Ghana, and cracking the code for Informal sector penetration.

Mr Ignatius Baffour-Awuah, Minister of Employment and Labour Relations, in his keynote address, said despite the initial implementation challenges, the 3-Tier Pension Scheme had seen an overall positive growth, especially for the private pensions industry, while the regulatory activities initiated by the government had also ensured real time monitoring and strengthened security of pension funds and investments.

He said the rationale was to ensure equity, fairness, and enhance pension benefits, as well as the retirement income security of workers both in the formal and informal sectors, and it was expected that a system of prudential supervision and regulation was always in place to protect scheme members’ interests and also safeguard the stability of the pension system.

The Minister said the NPRA undertook a holistic assessment of the pensions industry, and had trained Pension Trustees, and enhanced stakeholder engagements among other things to improve coverage across sectors, and government would continue to leverage on all technologies to enable the regulator to bring its services closer to the people.

He however, called for maximum collaboration from all industry players to support government’s efforts at providing effective guidance for the management of pensions, and commended also the NPRA for working hard to ensure that the 3-Tier Pension Scheme lived up to its bearing, by skillfully handling issues of the informal sector pensioners.

Mr Daniel Aidoo-Mensah, the Lead Consultant, NPRA, said contributors could now use their first and second pension Tiers as collateral for building loans or housing mortgages, but he encouraged the government to improve the low salary levels of workers for positive impacts on their pensions.

Ms Elizabeth Brago-Yeboah, the Co-Chair of the Conference, said the 3-Tier Pension Scheme, emanating from Ghana’s first pension reforms, chalked its 10th years in 2020, and the platform presented an opportunity for assessing its performance, educate the public to better connect to the industry, and to identify strategies and solutions to address key industry challenges and concerns to ensure sustainability.

It further sought to bridge the gap between major industry players such as the Regulators, trustees, fund managers, custodians and consultants, with the real sector, capital markets, the broader investment community, contributors, retirees, other pension plan beneficiaries and the public.

The delegates would collaboratively identify potential opportunities available to drive economic growth and support national economic development for the attainment of the UN Sustainable Development Goals (SDGs).

Mr Hayford Amankwah, a Senior Manager, Standards and Compliant Directorate, NPRA, said a range of stakeholders had been trained for the smooth transition and enrollment of contributors, and the Authority was currently focused on the informal sector whose total coverage was as low as just three per cent as at the close of 2019.

He said the performance of Ghana’s pension fund managers would be crucial to the system’s success, because their judgments for high yield investments to ensure adequate profits for contributors at their retirement was very key.

Mr Seth Ansah Obiri, the Managing Director, United Pension Trustees Limited, a pensions Fund Company, described the informal sector as very slippery and difficult to handle because of the numerous bitter experiences that had created so much mistrust, but said cracking the code for effective industry penetration, would require intensified education and awareness creation.

Mr Romeo Bugyei, the Chief Executive Officer, of IT Consortium, suggested the expansion of innovative technology platforms such as Mobile Money (MoMo) applications, which had proven to be an effective way to rope-in informal sector workers onto the pension scheme and to improve their culture of savings, but said selling the idea had remained a challenge.