[ 2014-10-31 ]

Pension funds accrue GH¢2.1bn
An amount of GHc2.183 billion has accrued since
January 2010 from the second-tier pension scheme,
the National Pensions Regulatory Authority (NPRA)
has said.

Out of the amount, GHc1.64 million represents
total contributions from both public and private
sector employees and returns on investment, while
GHc542.72 million represents funds being managed
by the scheme operators.

Addressing a press conference in the wake of the
controversy surrounding the second-tier pension
scheme, the Chief Executive Officer of the NPRA,
Mr Laud Senanu, said the transfer of the
contributions to registered schemes was expected
to begin in December 2014, after an audit of the
accounts had been completed.

The management of the second tier pension scheme
has become the bone of contention between 12
labour unions and the government.

While labour insists on appointing its own
trustees, the government has appointed Pension
Fund Alliance as trustees over the second-tier
pension.

According to Mr Senanu, the transfer of the
Temporary Pension Fund Account (TPFA) to the
various registered schemes would begin by December
2014.

“The NPRA wishes to assure employers, workers
and the general public that all contributions made
in January 2010 into the TPFA are safe and
intact.

“Once the audit exercise is completed, transfers
to the various registered schemes will begin,
hopefully by December," Mr Senanu said at the
event, which was used to address recent concerns
by workers and the government on the pension
funds.



The issues

About 12 labour unions are currently on an
indefinite strike in protest against the
government's decision not to allow them to manage
their tier-two pension funds.

Under the new pension law, the National Pensions
Act, 2008 (Act 766), the Social Security and
National Insurance Trust (SSNIT) gets 13.5 per
cent from contributors, while five per cent goes
to the second-tier operators to be managed by
corporate trustees on behalf of contributors —
employees of public and private institutions.

Although the law was passed in 2008, it took
effect in 2010, within which it mandated employers
to deduct five per cent of their employees'
monthly salaries and pay it into a TPFA at the
Bank of Ghana (BoG).

The account was to absorb the contributions in the
meantime, while the NPRA, which is the regulator
of the pension industry, put up the right
regulatory framework, licensed the trustees and
registered them for actual work to start.

The Minister of Employment and Labour Relations,
Mr Haruna Iddrisu, explained recently that the
government could not entrust the management of the
pension scheme into the hands of the workers
unions.

The unions have, however, vowed to call off their
strike only if the government releases the money
that has accrued from their tier-two pension fund
into their various schemes.

The Attorney-General, on October 24, 2014, sued
the workers on behalf of the government, asking
the Accra High Court to declare the indefinite
strike illegal.

A statement of claim accompanying the suit prayed
the court for an order to compel the unions to
call off the strike and resume work.



Breakdown of funds

The CEO of the NPRA explained that the authority
had received GHc1.01 billion, being contributions
between January 1, 2010 and October 27, 2014, from
SSNIT, on behalf of the private sector, and the
Controller and Accountant-General’s Department
(CAGD), on behalf of public sector workers.

The SSNIT collections, he said, amounted to about
GHc488.77 million, while that of the CAGD totalled
about GHc521.89 million.

To reconcile information provided by employers and
enable the generation of the statements of members
to the scheme, Mr Senanu said the accounting and
auditing firm, PwC, had been engaged to audit the
data, after which the funds would be disbursed to
the respective trustees for management.

The firm was engaged in April this year, he said,
adding that its final report was expected by today
October 31, 2014, after which the various
stakeholders, including fund administrators, the
CAGD and corporate trustees would meet to
deliberate on the transfer of the funds.

He asked workers to exercise restraint as the NPRA
executed its mandate under the law.



Employers under second tier

Touching on the registered number of employers, Mr
Senanu said about 10,000 employers had registered
for the second-tier scheme, instead of about
35,000 eligible employers.

Explaining the legal basis of the TPFA, Mr Senanu
said the National Pensions Act, 2008 (Act 766)
mandated every employer to open a Temporary
Occupational Pension Fund Account with the Bank of
Ghana to hold the five per cent of the second
tier.

However, he said due to the fact that the Bank of
Ghana did not have branches all over the country,
stakeholders agreed to give SSNIT the mandate to
collect the five per cent contributions on behalf
of the employee from the employer.

Source - Daily Graphic

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