‘Ensure your employer pays your pension contributions’

The National Pensions Regulatory Authority (NPRA) has underscored the need for employees of various organizations in the country to ensure their social security contributions were paid regularly by their employers.

According to the authority, it was the right of employees to have their contributions paid and therefore employees must collect their statements regularly to check anomalies such as non-payment or under payment of contributions.

Mr. Emmanuel Dagbanu, the Education and Training Manager of the NPRA gave the advice during a presentation on the Three-Tier Pension Scheme at an outreach programme held in Cape Coast on Tuesday to deepen the understanding of workers in the formal sectors.

The day’s programme was attended by participants drawn from various public sector organizations, agencies and institutions in the Cape Coast Metropolis and its environs. The Three tier pension scheme, which comprises two mandatory schemes and a voluntary scheme, was implemented in January 2010 following the passage of a New Pension Law by parliament in 2008 to replace the previous social security, CAP 30 and other related scheme.

The first tier is the Mandatory Basic National Social Security Scheme which incorporates an improved system of the Social Security and National Insurance Trust (SSNIT) benefits, mandatory for all employees in both the private and public sectors and is managed by the SSNIT, which is undergoing reconstructing to strengthen its operations.

The second is the occupational or Work -Based Pension Scheme, mandatory for all formal sector employees but privately managed and designed primarily to give contributions higher lump sum benefits than previously available under the SSNIT Pension scheme. It managed by trustee licensed by the NPRA and supported by registered pension fund managers and pension Fund custodians.

The third is the voluntary Provident Fund and personal pension scheme is supported by tax incentives which target workers in the informal sector was also designed to provide additional funds for formal sector workers, who want to make voluntary contributions to enhance their pension benefits Mr. Dagbanu further advised employees to also enquire how much they were contributing to the mandatory scheme as well as update their records regularly to ensure accuracy of the scheme.

He indicated that it was the responsibility of employers to arrange for their employees to join a scheme under the mandatory second tier by setting up an employer sponsored scheme or joining a Master Trust Scheme which was open to multiple employers.

Mr. Dagbanu said the benefits of the new scheme included the reduction of the qualifying contribution period from 20 to 15 years, the increase in annuity period from 12 years to 15years and the ability to use ones future lump sums under the second tier to secure a mortgage for their primary residence.