Pension should not be a death sentence

Pensions in Ghana came about through colonisation, industrialisation and urbanisation. Both private and public pension schemes were started in the colonial era to cater for different classes of workers.

By the Pension Ordinance of 1946, a non-contributory pension scheme was established for workers, and since then pension schemes have gone through various reforms to the current regime being operated under Act 766, which was implemented in 2010.

The new Pension Law made provision for a first, second and optional third tier.

The first tier is a basic national social security scheme for all workers in Ghana. It is a defined benefit scheme and mandatory for workers, whereby 13.5 per cent contribution is made on their behalf by the employer.

The second tier is a defined contributory occupational pension scheme mandatory for workers, with five per cent made on behalf of members. This is managed by private trustees.

The third tier includes all other provident funds and other pension funds outside tiers one and two.

The three-tier pension plan aims to serve multiple purposes. Among others, it is to address the challenges that were posed by institutional fragmentation and inequality to provide an organised and well-coordinated framework for income security arrangement in the country.

Again, it was to accumulate funds through retirement contributions for domestic capital market development.

As a result, providers of pension-related services are required to, among other things, invest pension contributions in bonds, bills and other securities issued by the Bank of Ghana or the Government of Ghana.

Based on this knowledge that any delay in investing money from contributions will affect returns on investment, workers had been agitating in the past that their outstanding tier-two contributions that were lodged into the Temporary Pensions Account at the Bank of Ghana be released to their respective fund managers.

Fortunately and happily, yesterday during his State of the Nation Address in Parliament, the President, Nana Addo Dankwa Akufo-Addo, announced that the outstanding six-year pension fund of GH¢3.1 billion had been paid into the custodial accounts of pension schemes of labour unions.

We at the Daily Graphic cannot say much, except to highly commend the government for this and encourage it to, at all times, seek the welfare of workers. We say that the government has shown leadership and commitment and we implore especially workers to put in their best at their workplaces, which will consequently impact on productivity for the enhanced development of the country.

While we are at it, we also congratulate the Beige Pension Trust on its launch of a one-year campaign to raise about two million people who can retire comfortably within the next 20 years or more. Two million people in comfortable retirement, no doubt, will have a tremendous impact on our socioeconomic life.

Once again, we commend the government and the Beige Pension Trust for prioritising the interest and comfort of the pensioner.
We urge the citizenry and corporate entities to hold the other side of the development load, so that, together with the government, we can get the best for the country to make pension enjoyable.

After all, pension should not look like a death sentence.