Tier-three pension scheme: Security agencies exempted

The Cabinet has given approval for the security agencies to be exempted from the unification of pension schemes.

The unification seeks to bring all pension schemes under the three-tier system by 2021.

The exclusion of the security services means they will remain on their existing pension programmes, such as the CAP-30

Per the National Pensions Act (766), passed in 2008, all parallel pension schemes are to be unified and brought under the three-tier system.

Under the CAP-30, which was set up in 1952, civil servants and the security agencies were not supposed to contribute towards their retirement benefits.

The Minister of Information, Mr Kojo Oppong Nkrumah, who announced this at a press briefing in Accra yesterday, explained that the exclusion of the security services from the unification of pensions was premised on the peculiar nature of their task and the risks they faced in their line of duty.

He mentioned the security services involved as the Ghana Police Service, the Ghana Immigration Service, the Ghana National Fire Service, the Ghana Prisons Service and all other security and intelligence agencies.

Government directs

The minister said the government had directed the Minister of Employment and Labour Relations to have the law amended to make room for the changes.

He said the decision was taken by the Cabinet last Monday at its 81st meeting after it had examined a report on the National Pensions Act, 2008 (Act 766).

“The Cabinet considered the recommendations of the report seeking the following actions for the completion of the unification process. One, the exclusion of the security services, that is, the police service, the immigration service, the National Fire Service, the Prisons Service, as well as other security and intelligence agencies. Two, the amendment of Act 766 to exclude the security services from the unification of pensions,” he said.

He said the Cabinet, in granting the approval for the security services to remain on their old pensions, directed the Minister of Employment and Labour Relations to commence processes to have the law amended to reflect the decision.

“The security services will not be subject to the unification of pensions and will remain on their old pension programmes. The security services will not be subjected to or included in the programme to unify pensions. They will instead remain on their already existent pension programmes, such as the Cap-30 and the other pension programmes that exist,” he said.

Implications

The Cabinet directive means that the Ministry of Employment and Labour Relations will have to cause the amendment of Section 213 of Act 766 to expunge the security agencies from the list of institutions whose pension schemes should have been collapsed and unified.

When successful, the members of the Civil and Local Government Staff Association of Ghana (CLOGSAG) and the Ghana Universities Staff Supernuations Scheme (GUSSS) will be the only groups of workers whose pension scheme will be collapsed and unified.

Some pension sector experts who spoke to the Daily Graphic on condition of anonymity said the action was counter-productive and defeated the primary purpose of the pension sector reforms, whose implementation started in 2010, reports Maxwell Akalaare Adombila.

They expressed the fear that the exemption of the security services would deepen the disaffection among worker groups that would be unified and also increase the cost of social security contributions to the government.

"This technically means that unification is a dead horse and it risks increasing the government's indebtedness to the pension sector," one of the sources who have been part of negotiations to unify the various pension schemes, said.

Background

Ghana began processes to unify its pension regime in 2018.

With an approval from the Cabinet to develop a road map towards the unification of the regime by 2021, the Ministry of Employment and Labour Relations engaged stakeholders within the sector in a bid to unify all parallel pension schemes and incorporate them under the three-tier system, as stipulated in the National Pensions Act, 2008 (Act 766).

The process of unification is one of the mandates of the National Pensions Regulatory Authority (NPRA).

The CAP-30 pension scheme, which many agree has outlived its usefulness, is a non-contributory pension scheme instituted in 1952 under the Pensions Ordinance, No 42 of Chapter 30, for civil servants in the service before 1972.

COVID-19 update

Providing an update on the national COVID-19 situation, the Director-General of the Ghana Health Service (GHS), Dr Patrick Kumah-Aboagye, said the active COVID-19 case count stood at 1,723.

He said the total number of recoveries and discharges was currently 41,279.

“The death toll has also increased from 256 to 261, with the latest death recorded on August 13. The total case count stands at 43,216,” he said.

He said Ghana currently had a case fatality rate of 0.6 per cent and had carried out a cumulative test of 431,272.