IMANI Ghana Wants NPRA Probed

IMANI Ghana has called on government to compel the National Pensions Regulatory Authority (NPRA) to immediately produce an investment report that details how much money it has received since its establishment, what it has invested the amount into and what returns on investment it has realized.

“The NPRA should be ordered to license Tiers 2 and 3 Schemes immediately and announce a cut-off date for taking Tier 2 contributions into the Temporary Pension Fund by employers. That cut-off should be contributions for September 2012 assuming that some companies have already made September contributions already. This is to allow for uniformity,” a press statement which it recently issued stated.

Imani Ghana also prayed government to direct NPRA to inform employers to make their mandatory Tier 2 and voluntary Tier 3 contributions into schemes of their choice starting from contributions for October 2012.

“The Board Chairman or the entire Board should be made to step aside while a forensic audit is undertaken on the stewardship of the NPRA over the Temporary Pension Fund and the investment activities of the NPRA with respect to same.”

According to the policy think-tank, workers who retire now risk not getting their lump sum benefits.

“In fact people who have retired since 2011 but have made the 5 percent Tier 2 contributions still cannot access their lump sum benefits based on the contributions made since January 2010. This is a potential crisis. There may be no accountability as to what the contributions have used for. The longer the status quo remains, the direr the accountability question becomes.”

It noted: “It is important that serious efforts are made to reconcile contributors’ data to ensure that cash and investment holdings that are under the custody of NPRA in aggregate is equal to the total liability due to the contributors before statements are sent out to them. The caution is that defined contribution is fully funded and at any point in time the contributors’ statement and the funds should be the same.”

It argues that since the NPRA is not a Fund Manager, it has neither the resources nor the skill to be investing the contributions it has received since January 2010 in order to maximize returns for workers’ contributions. The Ghanaian worker ultimately suffers.

“Tax incentives on the Voluntary Tier 3 cannot be enjoyed because the NPRA has not licensed Schemes for Scheme Members to enjoy those tax relieves. The tax relief granted by the pension reform is the main incentive that encourages people to participate in the Voluntary Tier 3. Participating in Voluntary Tier 3 enhances the retirement incomes of workers.

“From an economic perspective, very important source of revenue needed for national and private sector development is still being held by the NPRA because all they can do is to invest the funds in government treasures. This is assuming that the funds have been invested at all. What is the proof that the funds are available anyway?”