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Tier Two pension monies: Govt pays GHȻ3.1bn to pension scheme

Government has transferred GHȻ3.1billion of Tier Two Pension monies lodged into the Temporary Pensions Fund Account (TPFA) at the Bank of Ghana (BoG) into the custodian accounts of the various public sector registered pension schemes.

This follows extensive consultations and negotiations with all stakeholders, especially members of the Forum who worked closely with the Ministries of Employment and Labour Relations and Finance.

The schemes are the Ghana Education Service Occupational Pension Scheme, Health Sector Occupational Pension Scheme, Judicial Service Occupational Pension Scheme, Hedge Masters Trust Occupational Pension Scheme and the Public Sector Workers Employees Pension Scheme.

Taking his turn at the Meet-the-Press Series organised under the auspices of the Ministry of Information, Minister of Employment and Labour Relations, Mr Ignatious Baffuor Awuah said the transfer of fund would pave way for the smooth and efficient payment of Tier 2 pension benefits to individual beneficiaries from next year.

He said in addition to the transfer of the money, government was in the process of expediting action to bring all matters arising out of the TPFA to an amicable end.

“I also wish to firmly assure you that efforts are being expedited to bring all matters arising out of the PTFA including data reconciliation of beneficiaries and the issue of past credit to a logical conclusion,” he emphasised.

Recounting the history of the scheme, he said for effective and efficient management of pensions and to ensure retirement income security for all, government in 2008 introduced the 3-tier pension scheme through the passage of Act 766 as amended to replace the then existing pensions law, PNDC Law 247.

He explained that under Act 766 as amended, employers were mandated to make a direct contribution of 13%for and on behalf of their employees, and employees contribute 5.5% making a total of 18.5% in contributions to the scheme.

“The Tier 1 which is the mandatory basic national social security scheme is managed by the Social Security and National Insurance Trust (SSNIT) and includes the payment of monthly pensions, survivors benefit and invalidity pensions to cover all employees who contribute in both the public and private sectors,” he added.

On the Tier 2 he said it was a mandatory occupational pension scheme privately managed and it was paid as a lump sum while the Tier 3 was a voluntary provident fund and personal pension scheme which was privately managed and administered and also paid in lump sum.

Mr Awuah noted that as at December 31, 2018, the active worker population recorded on the Tier 1 was 1,522,942 while the new members enrolled on to the SSNIT scheme increased from 281,303 in 2017 to 611,397 as of May 2019 at an average growth rate of 46.8%.

“Recognising the importance of pensions in addressing old age, poverty and maximising customer satisfaction, SSNIT undertook some urgent reforms to meet the demands of its clientele particularly pensioners,” he explained.

He said as a result of this, a new benchmark time for processing pension applications for payment had been instituted, adding that, “Currently, the average processing time for pension payment has reduced drastically from 30 days to 17 days and is paid mid-month ahead of workers salary.”

Touching on employment, the minister said the period under review which was from 2017 to July 2019, a total of 611,397 new jobs were created in the formal sector.

He noted that out of the figure, the Ministries, Departments and Agencies (MDAs) accounted for 343,458 new jobs while the private sector created an estimated 267,939 new jobs.

By Cliff Ekuful

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