Former Rector of GIMPA, Professor Stephen Adei, has called for a legislation to introduce a universal national pension scheme (UNPS) for every Ghanaian who has attained the age of sixty.
The premium to be paid under the UNPS, he suggested should be above the stipend given to the poor and vulnerable under the Livelihood Empowerment Programme (LEAP).
Professor Adei, who made the call at a symposium on the 50th anniversary of the Social Security and National Insurance Trust (SSNIT) in Accra at the weekend, explained that the scheme would help to depoliticise the LEAP.
He said the UNPS could be funded by a one per cent increase in Value Added Tax (VAT) paid directly to SSNIT, saying “the one per cent is a guess estimate and the actuarists can tell us an adequate level of taxation needed to fund such scheme.”
According to Professor Adei the UNPS could serve as national savings and financial buffer for the country.
“What I am saying is that we must move to a universal minimum pension for everyone at 60 funded through taxation. It will also add to national savings,” he said.
Professor Adei alleged that despite the political interference on its operations and refusal of government to pay workers contributions on time, SSNIT had performed exceptionally well since it was created.
According to him, SSNIT had not defaulted on the payment of pensions on even one occasion and that the threat of doing so in the future was far remote, saying independent actuarial calculations indicate that workers’ pensions were secured beyond 2030.
“I want to underscore that SSNIT has improved on its operation efficiency so that today we are not only celebrating longevity by a highly improved institution,” he said.
Prof Adei however, expressed concern that the impact of SSNIT had not been felt on economy because pension funds not only provide financial resources to individuals but long term financing of economic activities in a nation.
“ I want to underscore that the role of pensions in Ghana’s development has been less than ideal especially in comparison with other jurisdictions to date and that must improve despite the sterling achievement in sectors such as real estate, industry, financial sector and education through the student loan scheme,” he said.
He alleged that the muted impact of SSNIT could be explained by the fact that for a long time there were operational inefficiencies and interference of the state including non-payment of time by government of public servants’ contributions.
Prof. Adei entreated the government to grant SSNIT the autonomy of governance and operation to enable the Trust to execute its constitutional mandate well because a failed pension scheme could have dire consequences on individuals and the economy at large.
In this direction, he said, the state “must accept that SSNIT Pensions belong to workers and not to the state whole role must only be to guarantee the integrity of their operations.”
The former Rector of GIMPA entreated the management of SSNIT to expedite work on the second and third tier of the pension scheme else some workers 12 years from now would be short-changed.
By Times Reporter