IMANI on National Pension Regulatory Authority

IMANI Ghana a center for policy and education has called on the government to undertake a forensic audit into the financial management of the National Pension Regulatory Authority (NPRA) as regards the handling of the TPF.

Insisting that, any misdeeds found should be severely punished as well as monies unaccounted for be charged to the Board members.

Franklyn Cudjoe, Founding President of IMANI Ghana explained that, four years ago, after decades of pain with the way workers pensions were handled by the Social Security and National Insurance Trust (SSNIT), the country through the then government decided that reforms were needed. Corporate, public and self-employed persons were happy as at least the three tiered pension structure would have a level of control over their pension contributions, at least on the side of transparency in computing their rewards after long years of active service to the state.

He further explained that, sadly, three years on, the hope has been dashed with potentially disastrous consequences for workers who are not aware of the imminent danger to their livelihood claiming that, the Second tier contributions by Ghanaian workers, which is 5 percent of their monthly salaries are being managed on their behalf by the National Pensions Authority in total disregard to the National Pensions Act, 2008 (Act 766).

Franklyn quoted section 3(7) and 96(4) which states “Where an employer deducts a contribution from the salary of a worker, the contribution shall be held by the employer in trust for the purpose of this Act until it is remitted to the relevant schemes” (4) Where an employer deducts contributions from the salary of a worker, the contributions shall be held by the employer in trust until remitted to the trustees of the occupational pension scheme.

The Centre in a statement released to the media observed that, the NPRA have violated the directive of the above legal provision as stated that employers lodge employee contributions at the Bank of Ghana until the occupational schemes were licensed by the NPRA.

IMANI Ghana through its observations on the activities of the NPRA has raised alarm that, due to the configuration of SSNIT’s internal system as managers of Defined Benefits, SSNIT is having challenges in collecting and remitting contributions timorously? And that it is becoming onerous to keep accurate record on contributors’ principal and returns on investment and ultimately produce statements that would reflect the time value for money.

He again raised a point that, the formula for calculating pensioners’ lump sum based on past contributions is still under discussion three years after the pension reforms which means, as a worker, if you retired today, you may actually get your 25 percent lump sum benefit calculated based on all your long service to the state, but will be terminated at 2009 and potentially lose your second tier contributions from 2010 to 2012.

Franklyn Cudjoe who was optimistic of the information he was given out as a prompt to government to be conscious with the NPRA operations estimated that the total amount of Tier 2 contributions collected from workers by the NPRA since January 2010 to date was GH¢587,513 million.