Gov't Considering Private Pension Scheme - Peprah

Accra, (Greater Accra) 7 Oct.,

Accra, (Greater Accra) 7 Oct., The government and the Social Security and National Insurance Trust (SSNIT) have begun talks to introduce occupational schemes to be administered and regulated by Private Pension Fund managers. This will bring about diversification in the administration of pensions, thus enabling workers to receive additional benefits, the Minister of Finance, Mr Kwame Peprah, said in Accra today. He was opening a 10-day International Social Security Association (ISSA) regional training seminar being attended by 62 delegates from eleven English-speaking African countries including Ghana, Nigeria, Zimbabwe, Libya, Uganda, South Africa, Kenya, and Zambia. The Minister said the SSNIT Pension scheme runs alongside occupational schemes like those for civil servants, the military and other security agencies. ''The government's occupational schemes for its workers has involved such phenomenal outflows in terms of pension payments that government expenditure has been overstretched''. Mr Peprah said the supplementary scheme will ''create the impetus for the needed rise in the national savings level necessary for the accelerated economic development we yearn for as a nation.'' Mr Peprah said in furtherance of the opportunity for retirement benefits, individuals will be encouraged to take private and personal pension. In this regard ''a three-tier income protection system is being examined for adoption", the minister said. Mr Peprah said government has in recent times realised the need for a rationalisation of pension schemes in the country. He said even though the SSNIT Pension scheme has existed alongside the occupational schemes, it is better to have a basic national scheme which will cover all workers irrespective of one's occupation or vocation. ''This basic scheme is portable, thus allowing for mobility of labour across vocations and professions and therefore make it relatively easier for efficient career development, self-development and improved national productivity and efficient resource allocation''. Mr Peprah said government believes that if social security institutions regularly review their schemes, they will grow to meet the expectation of members. It will also have a smooth revision of the scheme and make room for orderly development of the society. Mr Peprah, therefore, urged social security administrators to recognise change as a permanent phenomenon which necessitates regular reviews of benefits and procedures. ''We need to remind ourselves that social security institutions on the continent are the only institutions of their kind that can genuinely provide income replacement, especially when a large section of the membership is very vulnerable and cannot willingly save for the future''. He charged the participants to come out with suggestions to make the pension scheme much better than it is now for the full emancipation of workers after retirement. ''As operators of the scheme, you are in a better position to come out with feasible solutions to address retrenchment and redeployment contingencies. ''We are not asking for the simple solutions involving the payment of unemployment benefits, but innovations that will create jobs and increase production''. Mr Peprah asked them to look at their current range of benefits and, where possible, add on benefits to address ''our peculiar African problems''. Mr Peprah said he was impressed by moves of other pensions institutions in Africa to convert their provident fund schemes into pensions schemes. ''It is certainly a move in the right direction since pensions provide a better income replacement than the provident fund''. Mr Peprah advised the delegates to adopt the tripartite approach involving organised labour, employers and government in determining the new schemes to ensure smooth transitions. Welcoming the delegates, Mr Henry Dei, Director-General of SSNIT, said it is necessary to take bold decisions to ensure rapid economic growth in the long-term within the framework of ''our various national development priorities''. He said pension institutions face critical investment decisions, considering the young nature of "our schemes and the fact that we are experiencing rapid capital formation and accumulation phase''.