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Business News of Friday, 9 October 2015

Source: Graphic.com.gh

Operate Tier-2 pension scheme, NPRA to compel private sector

THE National Pension Regulatory Authority (NPRA) has given hint of its intention to compel private sector establishments to operate the second tier (Tier 2) pension scheme.

Out of the 51,466 private establishments which are active under the SSNIT scheme, only 10,610 have registered under Tier 2.

“The NPRA’s main strategy is to distribute the 40,344 employers without schemes (EWS) through ballot. Thereafter, the EWS will be allocated to corporate trustees based on the ballot,” the Director of Regulations of the NPRA, Mr Ernest Amartey Vondee, announced at an organised labour leadership forum in Accra yesterday.

The forum, on the theme: “Implementation of the National Pensions Act (Act 766): Challenges and prospects”, was organised by the Trades Union Congress (TUC), with sponsorship from the Friedrich Ebert Stiftung (FES).

Mr Vondee said the NPRA had embarked on rigorous education/sensitisation of especially employers through stakeholder engagements, jingles and radio announcements to encourage enrolment, “but the response has not been significant”.

He said the authority further initiated stakeholder engagements to discuss the best way to deal with the issue, adding, “Meetings have been held with the 24 corporate trustees and some organised labour groups in this direction. The next is SSNIT.

On the unification of schemes with the coming into force of Act 766, he said the act required the unification of pension schemes in the country within five years after the coming into force of the law.

“So far, this has not happened, but processes are still ongoing to enforce this provision. For instance, a Drafting Instruction is expected to be sent to the Attorney-General’s Department shortly by the NPRA to enable the department to come up with a Legislative Instrument to make enforcement possible,” Mr Vondee said.

Touching on contributions made before the coming into force of Act 667, he said those were referred to as “past credit”, explaining that contributors to the new scheme (under Act 766) would be given credit in respect of an entitlement to a 25 per cent lump sum benefit based on their past contributions to the scheme.

An official of SSNIT, Mr Stephen Yeboah, who presented a paper on: “Updates on the implementation of the National Pensions Act”, said workers were better off under the new pension scheme, compared to Act 247.

Mr Yeboah took the leadership of the workers through the transition from the old scheme to the new one, explaining what workers stood to gain under the new scheme.

The Deputy General Secretary of the TUC, Dr Yaw Baah, said issues concerning pensions were critical and there was the need to ensure that the right thing was done.

Touching on the role of the unions on invalidity, he said when a member was incapacitated and rendered invalid, the union which that worker belonged to must act on the worker’s behalf.

The Resident Director of the FES, Mr Fritz Kopsieker, said pension issues should be tackled with all seriousness to ensure that people spent their retirement in dignity.

He said an effective pension scheme was critical to relieve young people from having to combine catering for their parents with catering for themselves.