Gov't tight-lipped over value of Tier-2 funds - NPRA

Government, on Monday November 21, 2016, transferred September Tier-2 pension monthly deductions to the custodian banks of Public Sector Occupational Pension Schemes.

Consequently, the 12 labour unions have put on hold their threat to embark on nationwide industrial action.

A statement issued yesterday by Isaac Bampoe Addo, Chairman of the Forum For Public Sector Registered Pension Schemes, said the Forum expect that there would be no break in the transfer of the 5% monthly deductions to the custodian banks.

However, information available to The Finder indicates that what is disturbing is that government has failed to disclose the amount that has accrued in the Temporary Pensions Fund Account (TPFA) at Bank of Ghana for the past six years that the deductions were carried out.

Another committee

According to the statement, another committee comprising representation of government, National Pensions Regulatory Authority (NPRA) and the Forum has been constituted to discuss outstanding issues with a view of ensuring their resolution.

GH¢1.6bn accrued as at 2014

When the Forum embarked on strike in 2014, the Chief Executive of the National Pensions Regulatory Commission (NPRA), said the amount accrued since the coming into effect of the new pensions law in 2010 is estimated at over GH¢1.6bn.

The breakdown of the GH¢1.6bn is as follows: GH¢522m being contributions from private sector workers, originally paid to the Social Security and National Insurance Trust (SSNIT) and later transferred to the Bank of Ghana (BoG), GH¢490m being public sector workers’ contributions paid to the Controller and Accountant General’s Department (CAGD) and then transferred to the BoG, and investment income of GH¢600m from the two sources.

This figure is far greater than the figure of GH¢440m that Mr. Haruna Iddrisu, the Minister of Employment and Labour Relations, indicated had accrued at press briefings in 2014.

GH¢200m not paid by govt in 2014

NPRA Documents presented to Parliament in 2014 and sighted by the media stated that the CAGD had “failed to transfer more than GH¢200 million of workers’ pension contributions” into the Temporary Pensions Fund Account (TPFA).

It was also reported that contributions collected by the SSNIT between June and September 2014, had also not been deposited into the TPFA.

Bank Transfer Advices (BTAs) to CAGD as on October 27, 2014, showed that the total contributions outstanding amounted to GH¢269,269,105.79, but this excluded contributions for August and September 2014, for which BATs have not been issued.

Moreover, this amount did not include interest on the delayed and unpaid contributions.

If the strike takes effect, public schools, hospitals and government machinery face total shutdown tomorrow.

By law, the 5% 2nd-Tier pension contribution for the previous month is to be paid within 14 days of the following month.

Law took effect since 2010

Although the law was passed in 2008, it took effect in 2010, within which it mandated employers to deduct 5% of their employees' monthly salaries and pay them into a Temporary Pensions Fund Account (TPFA) at BoG.

The account was to absorb the contributions while the NPRA, which is the regulator of the pension industry, put up the right regulatory framework, licensed the trustees and registered them for actual work to start.

With the promulgation of the National Pensions (Amendment) Act, 2014 (Act 883), the government postponed the implementation of the 2ns-Tier Occupational Pension Scheme for five years and that cut out those who were 55 years as at January 1, 2015.

The fact still remains that for those who fall under the National Pensions Act, 2008 (Act 766), cumulative contributions from January 1, 2010, have not been transferred to the custodian banks of licensed schemes of the Forum.