Business News of 2014-04-05

Enroll employees with 2nd tier pension scheme

The National Pensions Regulatory Authority (NPRA) has called on employers to register their workers under the tier-two scheme with any of the 24 licensed corporate trustees before the final deadline of the end of June.

The acting Chief Executive Officer of the NPRA, Mr Laud A.K.Senanu, announced that out of 35,000 employers who had registered with the Social Security and National Insurance Trust (SSNIT), only about 7,000 had their tier-two registered with the trustees as mandated by the Pensions Law.

The acting CEO was speaking at an outreach programme to educate and sensitise workers in the formal and informal sectors in Ho in the Volta Region to deepen their understanding of the new three-tier pension Scheme being run by the NPRA.

Mr Senanu indicated that because the scheme was new, the authority extended an earlier deadline from December 2013 to June 2014 to enable it to engage the employers to know their problems and also find mutually acceptable solutions to their difficulties.

However, non-compliance with the law till date by employers was delaying the transfer of their workers’ contributions to the Bank of Ghana.

To prevent the delay, he said, the authority would have no option but to place the workers under any of the registered schemes should the employers fail to take advantage of the deadline.

He assured the stakeholders from the formal sector who were skeptical about the security of their funds contributed under the tier-two that the funds were secure and were being invested in the Bank of Ghana and, therefore, every contributor would receive their full benefit when they retired.

The tier-two is an occupational or work-based pension scheme mandatory for all formal sector employees but privately managed and designed to give contributors higher lump sum benefits than previously available under the SSNIT pension scheme.

To properly regulate the pension industry, Mr Senanu disclosed that the Swiss government had signed a bilateral agreement of $2.4million to build the capacity of NPRA officials.

Under the agreement, three experts, he said, would be attached to NPRA for three years to assist in the training process.

“Since the Swiss also ran a three tier scheme, the experience from them,” he observed, would be very useful to improve on the NPRA’s capacity.

The third-tier scheme allows self-employed workers such as farmers, fishermen, market women, traders and drivers to participate in the scheme to take care of themselves in their old age.

The Regional Secretary of the Trades Union Congress, Mr Elvis S. Van-Lare, acknowledged the efforts of the NPRA in educating people to understand the law, revealing that the education had made workers embrace the new pension.