Informal sector educated on new pension scheme

Accra, April 22, GNA- The Pension Reform Implementation Committee (PRIC) on Tuesday met representatives of selected workers in the informal sector to sensitize them on the New Pension Scheme for them. Workers in the informal sector in the new three-tier pension scheme were included in the new system to those in the sector to save towards their retirement, improve their living standards and secure their financial autonomy.

The three-tier pension system was the main recommendation by the Presidential Commission on pension set up in July 2004 to replace existing pension schemes that would ensure retirement security for Ghanaian workers. It consists of two mandatory schemes which incorporate improved system of SSNIT benefits, compulsory for all employees in the private and public sector and a pension scheme for employees but privately managed and designed to give contributors a high lump sum benefit. The third tier is however a voluntary scheme. Addressing the workers, Mr. Daniel Aidoo Mensah, Project Consultant for PRIC said provisions had been made in the third-tier voluntary personal pension scheme covered about 80 to 90 percent of the working population.

He said contributions to the scheme were voluntary however informal sector contributors would have two accounts which were the retirement account and a personal savings account with rules. "Individuals can access benefits before retirement from personal accounts while proceeds of the retirement account shall only be paid on the retirement of the contributor as monthly or quarterly pensions," he added. Mr. Mensah also said the schemes were to be managed by trustees of the various groups, a pension fund manager and custodian which would be approved by authorities and the benefits to be derived were very appealing.

This, he said included a monthly or quarterly pension from retirement savings account, assignment of benefits for mortgages for primary residence and other retirement benefits. Chief Musah Adams, member of the committee who chaired the programme advised the workers to see the new pension scheme for workers in the informal sector as an opportunity to save towards their future and advised them to disseminate the information properly. "You are their leaders, and it is whatever you say that they listen to so please give them the right information in order for them to take advantage of this opportunity."

Those present at the meeting included Mr. John Nimo, Secretary of the Ghana National Association of Garages(GNAG), Ms Laura Otto, Greater Accra President of the National Association of Beauticians and Hairdressers(NABH) and Mrs Elizabeth Kusi-Aidoo of the National Drinking Bar Operators Association(NADBOA). Other committee members present were Mr Smart Chigabatia, Administrator of PRIC and the Executive Secretary of the Council for Indigenous Business Association (CIBA).