Debt exchange: CLOGSAG threatens strikes if government defaults on pensions payments

The Civil and Local Government Staff Association, Ghana (CLOGSAG), has hinted of an indefinite strike if the Government fails to honour the payment of pensions on due dates.

Mr Isaac Bampoe Addo, Executive Secretary, said, “CLOGSAG is serving notice on the National Labour Commission that, should the Government default in honouring any of the coupons, when due for the schemes, it would declare an indefinite nationwide strike.”

He said this at a press briefing in Accra on Thursday, as the Government embarks on a domestic debt exchange programme, where bondholders would exchange their instruments for new ones.

Under this arrangement, existing domestic bonds as of December 1, 2022 would be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.

Also, the annual coupon on all these new bonds would be set at zero per cent in 2023, five per cent in 2024 and 10 per cent from 2025 until maturity – coupons would be semi-annual.  

With the coming of this development and the potential impact on the financial sector, including pension funds, Mr Bampoe Addo, cautioned the Government not to default in honoring any of the coupons, when due.

Making reference to Section 98 of the Pensions Act, which made pension funds to be viewed as contributions of individuals and the Finance Minister’s statement that individual holders of bonds were exempted, he asked the Government not to renege on such commitment.

Mr Addo said, “Per section 102 on protection of accrued benefits, pension funds cannot be used for Domestic Debt Exchange Programme.”

“If these provisions in the National Pensions Act 2008 (Act 766) had escaped the Government, CLOGSAG would wish to draw the attention of the Government to these important provisions,” he added.

Mr Addo entreated all members to be calm and go by their usual duties and continue to contribute to good governance in Ghana.