Calculations of pensions clear — NPRA boss
The National Pensions Regulatory Authority (NPRA) has stated that the country’s pensions scheme does not need any additional laws to clearly spell out the benefits contributors to pension funds should receive after retirement.
The authority said this in response to the request of the implementation of a new law to regulate the calculation of the benefits for pensioners which was allegedly illegal.
The Chief Executive Officer (CEO) of the National Pensions Regulatory Authority (NPRA), Mr Hayford Atta Krufi, said this at the Graphic Business/Stanbic Bank Executive Breakfast Meeting, a platform which brought together corporate bodies and individuals to discuss matters of national interest.
He said this after concerns were raised by the Trades Union Congress (TUC) at the event.
The Administrator of Health Service Union of TUC Ghana, Mr Isaac Mensah, raised concerns about how the Social Security and National Insurance Trust (SSNIT) computed the pension funds for pension beneficiaries. According to him, SSNIT had not been fair to retirees over the years due to the way in which they calculated the benefits for pensioners.
He added that the TUC Ghana had detected some illegalities which SSNIT had deployed in the computation of the benefits for pensioners which was not backed by law.
According to him, SSNIT had imposed annuity on the payment of lump sum, which cumulatively reduced the lump sum for 12 years by 41.9 per cent, even though annuity was not in the PNDC Law 247 of 1991 which regulated pensions in Ghana.
“The calculation of the annuity’,he said, ‘has reduced the amount of money pensioners are entitled to by law”. Benefits of pensioners end up going back to SSNIT, he added.
He added that SSNIT used the Early Retirement Reduction Factor, an act which though had been incorporated in the PNDC Law 247 of 1991, had no Legislative Instrument (LI) to operate. However, SSNIT uses it to deduct a lot of money they pay to beneficiaries.
Mr Mensah then called for the implementation of new laws that could clearly guide the way SSNIT calculated benefits for retirees.
In an interview with the Graphic Business, Mr Krufi stated that there would be no need for any additional law.
He said the already existing laws were clear on the calculations of the benefits. According to him, the misunderstanding of the calculation was not a matter of inappropriate laws, but rather actuarial calculation.
He explained that the misunderstandings could be resolved by sitting with the actuarists and looking into the calculation methods and preferably re-arranging them to suit both parties.