Pensions regulatory to give ultimatum to employers

The National Pensions Regulatory Authority (NPRA) is to announce ultimatum to all employers in the country, to register all their workers under the second tier of the Pension Scheme. According to the authority, some employers have refused to register their employees under the scheme, and that is offends. The authority is encouraging all employers in Ghana to register their employees under the second tier scheme, because in a few months they will be given out ultimatum to all employers. ‘If they fail to do that, then we will compel on our own to place the employees on a scheme with a corporate trustees,’ according to the authority. The Chief Executive Officer (CEO) of NPRA, Mr. Laud Senanu in an interview with Daily Express said the authority wants to engage the trustees first before embarking on this ultimatum. ‘We want to do a lot more public education. The ultimatum should have come long ago,’ but adding that engaging the trustees on the scheme is very important. Mr. Senanu explained that when the scheme started some few years back, there were no corporate trustees, no fund managers and no custodian banks, because the authority was new by then. However, it was agreed that Social Security and National Insurance Trust (SSNIT) was to be collecting the second tier contributions and send them to Bank of Ghana (BoG). Daily Express gathered that since then all those contributions that were collected before the licensing and registration of the second tier providers were deposited at the BoG. He said now all those monies have to be transfer to the registered schemes. In order to give accountable to this contribution by workers, the authority appointed an auditor (Price Water House Coopers) to audit the account at the BoG. ‘They have three months (up to August ending) to complete their work task,’ said Mr. Senanu. ‘Once they finish auditing and we are satisfied, then all those monies will be transfer to the registered schemes,’ he added. He stated that over GHc1 billion is currently in the account at the BoG. These are the collection that has been made from January 2010 till date. ‘As a matter of fact, currently, there are still some employers who have not sign unto any scheme and those monies deducted are still been collected by SSNIT and been deposited at the central bank,’ said Mr. Senanu. ‘This is the reason why we will be given all employers ultimatum to register all their workers,’ He noted. Under the pension reform, there are three tier schemes. The first tier scheme is the basic one, which is been manage by SSNIT, the second tier scheme is compulsory and mandatory for all workers in the formal sector, and it is been manage by private fund managers. The third tier scheme is voluntary, and it’s also been manage by private fund managers and it is targeted at workers in the informal sector. ‘We did also encourage the pension fund trustees to set up schemes to roll in workers in the informal sector. Example is the Glico pension scheme, which has rolled in a lot of the cocoa farmers in the cocoa industry,’ said Mr. Senanu. He noted that the authority is also conduction a very vigorous public outreach programme to encourage all workers in the informal sector to join these informal schemes, been run under the third tier by private managers. ‘We have had a programme in Kumasi, another one in Ho and we shall be going to Cape Coast next month for another programme, and subsequently to the Northern parts of the country,’ said NPRA boss. According to NPRA boss, what they been telling the public is that, these schemes are been regulated by institution that have been registered and licensed by the authority. ‘They are visible institutions. We have checked their background and we assure ourselves that these companies are firms that can manage your funds very well. In a nutshell we are assuring them of safety and security of their funds, so as to entice them to join the informal sector scheme,’ he reiterated. In the same informal scheme, there are two accounts, with one account the client can start withdrawing from after 10 years, while the other account, which the client or the contributor can only withdraw from it when he/she retired or when become disable and cannot work anymore. This is part of the third tier and targeted at the informal sector workers. However, the second tier providers are three. They are public trustees, which is the administrator; a manager who advises them what investment have to be made; and custodian bank, where the money are kept. And all these people must be registered by the National Pension Regulatory Authority (NPRA) before they can start doing any business.