Business News of 2014-01-28

'Pension authority lacks resources to monitor'

A former Economic Integration minister, Dr Paa Kwesi Nduom, has raised a red flag about the management of the tiers two and three of the pension contributions in the country.
He said most of the companies licensed to take such contributions were investing in other areas which could jeopardise the contribution of workers and subsequently lead to a meltdown of the nation’s economy.
In an interview with the Daily Graphic, Dr Nduom, who contested the 2012 presidential election on the ticket of the Progressive People’s Party (PPP), said while the pension authority lacked the systems and requisite human resources to police the organisations collecting the money, the fund managers were misapplying the resources in areas such as real estate, with others reducing contributions they took from workers just to attract more.
He explained that those licensed fund managers were currently holding huge sums of money – some bigger than the deposits of some universal banks.
He said very little was known about the investments regarding the tier two which were collected by the National Pension Regulatory Authority (NPRA) on behalf of the Social Security and National Insurance Trust (SSNIT) and lodged with the Bank of Ghana.
Three Tiers
A first tier mandatory basic national social security scheme which will incorporate an improved system of SSNIT benefits is mandatory for all employees in both the private and public sectors.
The second tier occupational (or work-based) pension scheme is mandatory for all employees but privately managed, and designed primarily to give contributors higher lump sum benefits than presently available under the CAP 30 and the SSNIT pension scheme.
The third tier is a voluntary provident fund and personal pension schemes. It is supported by tax benefit incentives to provide additional funds for workers who want to make voluntary contributions to enhance their pension benefits and also for workers in the informal sector.
Dangers to the economy
He stated that some Ghanaians with knowledge of the industry were not commenting for fear of being branded as politicising such issues.
He attributed the challenge to problems facing regulators such as the NPRA, the Bank of Ghana, among others, because they lacked human resources and the financial wherewithal to offer the proper advice and crack the whip to ensure that pension funds collected were put to good use.
Source: graphic.com
« Previous | Next »
View Comments
Sponsor Links
News Categories
Site Menu