Government to develop micro-pensions policy for informal sector

Government is considering the development of a micro-pensions policy to guide efforts at improving informal sector coverage to unlock its huge potential.

Mr Ignatius Baffour Awuah, Minister of Employment and Labour Relations, disclosing this, said since 2017, government had been creating awareness on the Third-Tier pension scheme for occupational groups, which had whipped up the interest of informal sector workers not covered by any pension scheme.

Addressing a “press briefing” in Accra , he said effective January next year, Government would commence the full payment of pension benefits to retirees under the Third-Tier Pension Scheme.

He said the current enrolment on the informal sector was approximately 232,000, representing about three per cent coverage of the sector, stressing that the third-tier of the pension scheme was created to encourage contribution from workers of the informal sectors.

The Minister explained that, every pensioner from January, 2020 was to receive three pension benefits-monthly from SSNIT, past credit from SSNIT that is four per cent of the accumulated value of contributions from the date of first appointment to December 31, 2009, and tier two lump sum benefit from the Occupational Pension Schemes.

However, under tier three, corporate trustees are paying benefits to retirees as and when due.

Mr Awuah said the pension industry had been impacted by the outbreak of the COVID-19 pandemic, resulting in lay-offs, pay cuts and breaks in the operations of many businesses, which affected pension contributions for the year 2020 in all the three tiers.

He said the National Pension Regulatory Authority had already begun an assessment of the effect of the pandemic on the industry.

The Minister commended social partners for the cooperation and collaboration with the Ministry in executing its programmes, saying, “This has created a harmonious relationship that supports job creation initiatives and effective management of the labour market”.