Press Statement by the Forum on the State of Pensions


Ladies and Gentlemen of the Media

The FORUM made up of Unions and Associations namely:

1. The Health Service Workers’ Union
2. Ghana Registered Nurses and Midwives Association
3. Ghana Medical Association
4. Ghana Physician Assistants Association
5. Ghana Hospital Pharmacists Association
6. Ghana Association of Certified Registered Anaethetists
7. Ghana National Association of Teachers
8. Teachers and Educational Workers’ Union of Ghana TUC
9. National Association of Graduate Teachers
10. Coalition of Concerned Teachers, Ghana
11. Civil and Local Government Staff Association, Ghana and
12. Judicial Service Staff Association of Ghana
You would recall that after a long and hard struggle by Public Sector Workers supported by their unions for an improvement in retirement income in the mid-2000s, government set up the Presidential Commission on Pensions in 2006.

The outcome of the Commission’s report was the establishment of a Three Tier pensions scheme through the enactment of the National Pensions Act, 2008 (Act 766).

The new law introduced two mandatory schemes;

1. Basic national social security scheme and
2. An occupational pension scheme
By the new law, the 1st Tier Scheme which is the basic National Social Security Scheme is to be managed by the Social Security and National Insurance Trust (SSNIT). SSNIT would therefore pay only monthly pensions to retired contributors to the scheme.

The Second Tier Schemes, that is the Occupational Pension Schemes would pay lump sums to contributors on retirement.

The Third Tier Scheme, is a provident fund and personal pensions scheme.

The Second and Third Tier Schemes are to be managed by Trusts/Trustees, both are defined contribution schemes.

Unlike the basic National Social Security Scheme, which is a defined benefit scheme that pays out retirement benefits according to an established formula, the quantum of lump sums paid by the second and third tier schemes occupational pensions rely totally on the outcome of investments made by the Trustees/Trusts.

Ladies and Gentlemen of the press, we are here today to give you an update on the Three Tier Pensions Scheme since its establishment in 2008 and implementation effective the 1st day of January 2010.

In previous press conferences and briefings, we have carried you along the ardous journey of wedge that was placed in our wheels.

We need not inform you of the attempt by government to place all government employees under one trust- The Pensions Alliance Trust.

The strong resistance by the Forum of Public Sector Unions through demonstrations and strikes in 2014 drew the anger of our employer who went to court to place an injunction on the strike action and also filed a statement of claim in court against the respective unions comprising the Forum of Public Sector Unions.

Eventually, Government requested an Out of Court Settlement. The Court accepted the terms of settlement and gave judgement in February 2016.

Presently, four independent schemes have been approved and licensed by the National Pensions Regulatory Authority to handle the second Tier Occupational Pension Schemes for public sector workers in Education, Health, Judicial and Civil and Local Government Services. The Controller and Accountant General’s Department started the transfer of funds of contributors to the various schemes from September 2016.

However, there are numerous outstanding and unresolved issues hindering not only the smooth operation of the Public Sector Schemes, but also the implementation of the National Pensions Act, 2008 (Act 766).

The NPRA is to ensure that the terms of settlement filed by Government and the FORUM at the High Court in February 2016 are complied with by all parties.

Government has been delaying in the transfer of the monthly deductions to the custodian of the Occupational Pension Schemes knowing very well that any delay beyond the 14th of the ensuing month attracts a penalty.

Furthermore, the NPRA has not ensured the determination of an appropriate and acceptable past credit in respect of contributors who by the new Act are to claim their lump sums from the Occupational Pension schemes after they have made contributions for several years to the SSNIT Scheme.

In 2014, the National Pensions Act, 2008 (Act 766) was amended by National Pensions Act, 2014 (Act 883). The amendment reverted some workers back to the Social Security Law, 1991 (PNDCL 247) and also changed the formula that has been established by SSNIT Scheme.

The change has generated a problem as to how to handle the extra 1% deductions made on behalf of those workers, who have been reverted to the Social Security Law 1991 (PNDCL 247) by the National Pensions Amendment Act, 2014 (Act 883).

As indicated earlier, the 2nd Tier Scheme is a defined contributions Scheme and in order to increase retirement income for workers, the funds deducted would have to be invested prudently and timeously. The NPRA by its conduct has held up funds in the TPFA which is not yielding appropriate returns.

The NPRA has failed to inform Government on the accurate indebtedness owed to the various schemes as per the Act.

The Forum therefore calls for the following:

1. Government should transfer all contributions deducted from 1st January 2010 to 31st August, 2016 including penalties as required by the law, Act 766;
2. Per Section 13 of Act 766 the Minister for Employment and Labour Relations is responsible for Pensions and should remain as such.
3. The NPRA is to ensure that the terms of settlement filed by Government and the FORUM at the High Court in February 2016 are complied with by all parties.
4. We give Government up to 31st July , 2017 to resolve all outstanding issues raised.