TUC unhappy with NPRA over education on new pension

Abigail Bonsu Jan - 31 - 2013 , 05:58

The Trades Union Congress (TUC) has raised issue with the National Pension Regulatory Authority (NPRA), for failing to carry out adequate public education on the new pension reforms.

Addressing journalists at a day’s workshop in Takoradi, Mrs Rose Kwei, Head of the Informal Economy Desk of TUC, said the NPRA had failed in its mandate to sensitise the public to the new Pension Act, (Act 766) passed in 2008.

As a result of lack of adequate education, she said, most people in the country were uninformed about the law.

The NPRA is mandated to sensitise the public to matters concerning the various pension schemes and receive and investigate complaints of impropriety in respect of the management of pension schemes.

Mrs Kwei entreated the media to support the drive to educate and sensitise the public to the new pension reforms, since they affected the very future of every Ghanaian.

The government passed the National Pensions Act, 2008 (Act 766) to reform the old pension law PNDCL 247 to ensure retirement income security for employees.

That culminated in the introduction of a contributory three-tier pension scheme that took off on January 1, 2010.

Employers under the new Pension Act are required to remit 13.5 per cent of workers’ earnings to the social security scheme within 14 days after the end of the month, to the Social Security and National Insurance Trust (SSNIT).

In addition, the employee is enjoined to contribute 5.5 per cent of his or her earnings to the second-tier scheme that would be managed by a fund manager thereby bringing the total contributions of workers to 18.5 per cent.

The two-tier pension is a mandatory fully funded and privately managed occupational scheme while the third tier is a voluntary fully funded and privately managed provident fund, especially for workers in the informal sector.

Mrs Kwei said the new pension reforms aimed at unifying all existing public schemes, including CAP 30 within a period of five years from the commencement of the law.

The NPRA, a reguldy, is supposed to regulate and monitor the operations of the entire schemes and ensure effective administration of pensions.

The authority is expected to also approve, regulate and monitor trustees, pension fund managers, custodians and other institutions that deal with pensions as it may determine.

Furthermore, the NPRA is required to regulate and monitor the implementation of the basic national social security schemes, carry out research and ensure the maintenance of a national database of pension matters.

The Pensions Act requires employers to register their establishments with SSNIT, ensure that all their workers are registered with the scheme, as well as ensure that newly registered workers are issued with social security reference numbers.

Mrs Kwei said the minimum age at which a person could join the social security scheme was 15 years, while the maximum age was 45 years.

She said the act required that no employer paid contributions less than 13.5 per cent of the approved monthly equivalent of the national minimum wage even if the employee earned below the minimum wage.

Ghanaian workers for far too long had complained about poor retirement package thereby necessitating pension reforms for better retirement gratuity for both public and private workers.

GNA