The Corporate Affairs Department of the National Pensions Regulatory Authority (NPRA) has announced that about nine million people working in the country’s informal sector without any form of pension scheme risk slumping into retirement income insecurity.
The NPRA says between the next five and 10 years, such working individuals will retire poor and become a liability on their families and society if the situation was not addressed.
The picture being painted by the NPRA is a serious one but we wonder what can be done for such people to enjoy in future, considering their ages, which by inference can be put at 50 t0 55 years.
Our concerns about the matter is based first on historical evidence that Ghana introduced its semblance of the Social Security pension scheme in 1965 and that was a Provident Fund (PF) Scheme under which lump sums were paid to qualified members without monthly payments.
Itwas intended to operate as a PF for a five-year period (1965 to 1970) and thereafter be converted into a pension scheme for periodic monthly payments.
Even under this PF scheme, some workers became paupers because the PF payment was not enough for any meaningful undertaking to support their retirement life.
In 1972, the NRCD 127 establishedthe Social Security and National Insurance Trust (SSNIT),which subsequently converted the fund to a pension scheme.
Under that new scheme, contributors were supposed to do a minimum contribution of 240 months (20 years) to qualify for Superannuation Pension/ Old age Pension.
There were also Invalidity Pension, Survivor’s Lump sum and Emigration benefit.
Currently the reformed scheme has all the benefits but demands that contributors should do 180 months’ (15 years’) contributions to earn the Superannuation Pension/ Old age Pension, with the other benefits having their own guidelines just as it was the case under previous arrangements.
Though there are various pension arrangements besides the monthly payments from SSNIT, we are forced to ask what can be done for people aged even 47years to qualify for pension, let alone those who are 50 and above.
We, however, know that in the event that a contributor does not qualify for Old Age Pension when he retires either compulsorily or voluntarily, histotal contributions will be refunded with interest to him.
Sometimes, this also creates some of the PF hardships
Considering the age and contribution thresholds in pension arrangements, we wonder what the NPRA can do for the ‘over-age’ workers in the informal sector to secure any pension.
Maybe, we are getting the NPRA wrong because we see it as not having articulated its points well enough for us to make meaning out of it.
Therefore, we appeal to the NPRA to come again, but this time with what is convincing.
We think with evidence of retired workers suffering from hardships due to low pension payments or none at all, the NPRA conversation is useful in spite of some gaps in its communication.
It is really the time to educate informal-sector workers to patronise pension schemes and even for formal sector workers also to look elsewhere in addition to the SSNIT arrangement to secure good income while on retirement.
