A total of about 1.8 billion Ghana cedis has accrued from the pensions contributions of both public and private workers lodged at the Bank of Ghana since the pensions reforms took effect in January 2010.
The amount comprises the 2nd tier contributions and investments returns as at March this year. It is lodged in the Temporary Pension Fund Account, that’s the TPFA at the Central Bank awaiting transfer to the private pension fund operators for further investment. Interestingly, the contributions remitted into this account have increasingly been reducing.
The Chief Executive of National Pensions Regulatory Authority, NPRA, Laud Senanu, however, explains to JOY BUSINESS, there is no cause for alarm.
“Towards the end of last year, we came out with a notice to remind all employers that they had up to the end of the year to register or join 2nd tier schemes failing which the authority reserved the right to place them on a scheme without their consent.
Even though we haven’t begun the process, a lot more have taken notice of the announcement we have made and on their own they are registering 2nd tier schemes or joining master trust schemes operated by the corporate trustees so that they don’t contribute through SSNIT anymore. That’s another reason you’ll see that the contributions from SSNIT is reducing” he said.
He adds the reduction in contributions doesn’t necessarily mean employers are no more remitting through SSNIT.
“Employers who now have registered schemes are in the majority, let’s say about 70 percent. But there are still some employers who are still paying through SSNIT and these are those we keep giving notices to. Some of these employers feign ignorance of the private operators whilst other claim they are aware but they find it more convenient to make one payment at SSNIT.
Meanwhile, many employers are still defaulting in the payment of their workers 2nd tier pensions contributions but the NPRA says it is for now unable to take action against the culprits. This, according to the authority is due to the lack of the requisite systems with the pension’s reforms still at the budding stages. Mr. Senanu says even though the authority is concerned, its hands are tied. “Beyond issuing notices to all employers to register 2nd tier schemes, we also have to look at the reality on the ground because we have employers covered all over the country, meanwhile we don’t have corporate trustee operating throughout the country.
You know this whole business of 2nd and 3rd tier scheme is a new phenomenon that came up with the reforms. So people are now buying into it. You have some corporate trustees now trying to set up corporate offices in the regional capitals after which they would move to the district capital and this would take a while,” he noted.
He adds steps are however being taken to rectify the situation but no timelines can be put to it.
“We have encouraged the corporate trustees to use modern technology like phone numbers and emails to reach clients after an outreach programme where they are not necessarily present.
But through our constant engagement with employers and the trustees, we would know how soon such a process would come to end so that all employers across the country can get in touch with a trustee and register” he concluded.