We need a national conversation on pensions
Last week, the Africa Centre for Retirement Research (ACRR) made the depressing revelation that three out of every five Ghanaian pensioners were very poor and struggled to live well in retirement. (See front page)
The statistics suggested that 60 per cent of Ghanaian pensioners barely survive once their active working life comes to an end.
The data, according to the research outfit, were based on the findings of a survey, which pegged the poverty measurement threshold at $2 per day, just above GH₵20.
The centre consequently recommended a review of the current pension system to make it more efficient and equitable for beneficiaries.
While the survey must have been restricted to formal sector retirees, the findings generally must be concerning for the average Ghanaian, as retirement remains a certainty that stares from a distance.
Pension is a necessary conclusion to a working life. It is supposed to be a life of rest and recreation, uninhibited by stress and strenuous activity.
It is supposed to be a period when retirees enjoy the fruits of their active service labour.
However, the case is different for the Ghanaian pensioner as revealed by ACRR.
It is actually common to find the elderly in our society still engaged in economic activity for survival, many times in a strenuous manner that undermines their health, with varied implications.
This scenario is because of the kind of remuneration that the average worker receives while in active service.
Pension stipends and receipts are a function of working life earnings.
What it means is that the higher their earning during their active working life, the higher the corresponding monthly pension pay.
Conversely, a relatively lower working remuneration will leave the worker with a lower pension pay upon retirement.
The widespread poverty levels among Ghanaian pensioners are, therefore, a direct reflection of the prevailing income levels of Ghanaian workers.
It should be noted, however, that pension stipends do not factor in allowances that workers do not pay taxes on.
The truth is that the gap between the so-called "rich" and "poor" continues to widen, which impacts their respective pension receipts.
As submitted by the centre during a stakeholder engagement to disseminate the report, the current pension reward system has the tendency to increase economic disparities between the rich and the poor.
Unfortunately, however, aspects of the report made reference to supposed inadequacies of the prevailing social security regime.
We are, however, mindful of the daily minimum wage currently pegged at GH₵19.97, less than the $2 per day poverty measurement threshold set by the ACRR.
This provides some explanation for the generally low pension in the system.
As stated earlier, the local pension system manned by the Social Security and National Insurance Trust (SSNIT) is a safety net providing retirees with funds for upkeep in retirement.
The regime is not responsible for how much an individual receives as a pension stipend.
The bigger conversation revolves around the proposal by the government, announced by President John Dramani Mahama during his engagement with the media recently, that a discussion about the public sector wage structure is long overdue.
The intention is to provide better working conditions for public sector workers and to remove inappropriate disparities among similar working groups.
The existing single spine pay policy, put into effect in 2009, was to correct the wide disparities among salary earnings in the public sector.
However, as admitted to by President Mahama, the policy has been distorted by various factors in the course of time.
Given the concerns contained in the pension survey report, the proposal by President Mahama comes in handy as a necessary intervention to solve the meagre pension pay issue for pensioners.
It is in giving workers adequate compensation in terms of remuneration that they will be assured of better pension pay in retirement.
However, better remuneration is also a function of productivity.
The entire system, therefore, requires an improvement that affects daily wages, monthly salaries and pension pay.
Anything short of this is to tell a retiree: “You are on your own” once they leave active service.
The solution lies with all of us.
