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Business News of Tuesday, 25 August 2020


Labour unrest looms as TUC laments unfairness in implementation of 3-tier pension scheme

TUC General Secretary, Dr Anthony Yaw Baah TUC General Secretary, Dr Anthony Yaw Baah

The Trade Union Congress (TUC) Ghana has called on government to intervene and correct “injustice and unfairness in the implementation of the three-tier pension system to avert imminent labour unrest.

In a letter signed by Secretary General of TUC Ghana, Dr Anthony Yaw Baah and addressed to President Nana Addo Dankwa Akufo-Addo in Accra yesterday, the TUC stated that the “injustice and unfairness” in the implementation of the system has led to retirees receiving lump-sums that do not match their contributions to the Social Security and National Insurance Trust (SSNIT).

It said their analysis of data the TUC has gathered from retirees revealed that the lump-sum benefits, which was the Past Credit being paid by SSNIT following the introduction of the three-tier scheme, was based on a formula not clear to TUC.

The letter explained that the Past Credit represents part of the contributions retirees made to the SSNIT scheme, the first-tier scheme, before the commencement of the implementation of the three-tier scheme in January 2010.

It said although TUC, has on several occasions, called for a stakeholder meeting to discuss the concerns, no such meeting has been convened.

The TUC further noted that, it was their view, that government’s huge indebtedness to SSNIT was one of the factors that have compelled SSNIT to pay low lump-sum in order to protect the scheme and have adequate funds to pay monthly pensions to retirees on SSNIT payroll under the first-tier scheme.

The letter also asked the President to review Cabinet approval for the exclusion of security agencies from unification of pensions under the three-tier pension scheme as provided for in Act 766 of the National Pensions Act, 2008.

“Such a policy will undermine the solidarity principle that serves as a bedrock for the three-tier pension scheme, particularly the first-tier SSNIT Scheme. TUC cannot support such a policy,” it stated.

Earlier this month, the TUC called on the government to immediately convene a stakeholders’ forum to discuss and review upward the low lump-sum benefits and related issues of pensioners.

It noted that the second-tier contributions had not been invested over a long enough period to generate adequate returns, as envisaged by the proponents of the three-tier pension system.

This, according to the TUC, leads to a genuine fear that workers who would retire in 2020 and beyond might be worse-off in terms of lump-sum benefits compared to lump-sum benefits under PNDCL 247.

“Pension Payment Statements we have gathered from some of our members who retired in 2020 show that they are worse-off because their lump-sum benefits are far lower than what they would have received if they had retired under PNDC Law 247. This is unfair and unjustifiable,” the group argued.