Pensions Regulatory Authority wants to increase retirement age from 60 years

The National Pensions Regulatory Authority (NPRA) is considering proposals to increase the retirement age from the current 60 years.

Chief Executive of NPRA, Hayford Attah Krufi, said the Authority is also considering a similar proposal to increase the deductions made from the workers' salary for the Social Security and National Insurance Trust (SSNIT) pension scheme.

He said the proposals for the reforms in the sector have been necessitated by the challenges facing the pensions scheme.

The current pensions law provides that full pension workers must have attained 60 years of age (55 years if working under hazardous conditions) with at least 180 months (15 years) of contributions.

However, an early pension is also available to workers from the age of 55 years with at least 180 months (15 years) of contributions.

According to Mr Atta Krufi, Ghana’s retirement age of 60 years could result in losses in the workplace in both human and financial resources.

“If you train an expert and the person can give a lot more at 60 and you ask them to go home, they will go into some consultancy and they may even come back to the same business and charge you higher.

“In Europe, a lot of countries within the European Union have revised their pension ages and UK, it’s almost like every year they revise it, because the women live longer,” he said on a current affairs programme on Joy News TV.

He has called for national dialogue over the key proposals.

He added that the situation is worsened by the fact that the rate of retirement is not comparable with the rate of hiring.

“There are people who have a lot of experience at age 60 and then they leave, and then also hiring people to come on board is also not commensurate with the rate at which people are leaving.”

According to him, the deductions even with the current 13%, there are issues of indebtedness.

"These are decisions that cannot be taken by the administrator of the Trust itself, we need to have a national conversation. At the end of the day, when we talk about the contribution it is the employer and the employee their ability to pay.

"Currently, even with 13% that the employer is paying we've talked about indebtedness, the biggest employer is the government so if the contribution should go up like 19% or 21% it means that the proportion that the individual or the employer will have to pay will go up..." he said.

He said the use of only base salary in computing and paying pensions or whether allowances should be added is also worth discussing.

“People have little understanding of financial literacy and pension. Also, with happenings in the banking sector and failures with investments, any education that encourages people to put aside some money becomes very difficult,” he noted.

Mr Krufi admonished workers in the informal sector to consider registering on at least one pension scheme, particularly the voluntary one, which is the third tier pension scheme.

He said the 3rd-Tier scheme was designed to cater for the peculiar needs of workers in the informal sector, adding that they could register with any of the 22 corporate trustees that had been approved and licensed by the authority.