Retiring workers for 2020 have been made victims of the pensions reform system.

According to a Daily Graphic investigation published on October 5, 2020, the promise of better retirement earnings has only delivered less than what the pensions regulator, previously gave to retirees.

The investigation also revealed that among tiers one and two, benefits remunerated to people who retired this year under the National Pensions Act, 2008 (Act 766) received an average three times lower under the PNDC Law 247.

However, the differences are in spite of comparisons in the ranks achieved, incomes earned and the number of years one worked and contributed to the scheme prior to retirement.

According to the Daily Graphic, a nurse who retired this year as a Deputy Director of Nursing Services (DDSS) in the Upper West Akim District in the Eastern Region received GH¢16,019.70, made up of GH¢10,019.70 as Past Credit under tier one and GH¢6,000 from tier two investments.

The nurse whose name is withheld said she had worked for 38 years and contributed to the pension scheme for 504 months.

Another, whose name is also withheld and served as a community health nurse/ midwife and retired in 2019 said she received GH¢62,607.23, after contributing for 508 months to the pension system.

The nurse told the Daily Graphic that she was bemused and was still recovering from what she describes as a “shock” which came with the amount she received5 as Past Credit.

“When they printed my statement for me in the district office of SSNIT, I had a blackout. I sat there for more than 30 minutes without being able to open my mouth,” she narrated.

Petition to SSNIT

The nurse, however, revealed she wrote a petition to the district office of the SSNIT to look into the matter indicating that with “38 years of unblemished service, the amount paid was just a little over GH¢10,000”.

According to her, the petition also noted that the amount “cannot do much in this economy of ours to secure a peaceful retirement”.

SSNIT, in a response to the nurse, said that the formula used in calculating the benefits for pensioners was prudent and that the retired nurse was not in any way cheated but was paid the right due amount under the Pensions Act 766.

Others retirees stories

A teacher in the Jaman South District of the Ashanti Region who retired as Assistant Director disclosed, he had received GH¢10,644.31 as a benefit, after working for 34 years and contributing for 405 months.

While another teacher who retired on the same rank in 2018 said he had received about GH¢63,256, after contributing for around 401 months.

The story is also the same for a staff member of the Ghana Water Company Limited (GWCL) whose name is also withheld.

The former staff member said he had retired earlier this year under Pensions Act 766 but only received GH¢42,369.65, comprising GH¢15,369.65 as Past Credit under tier one and GH¢27,000 under tier two, after working for 37 years and contributing for 444 months to the scheme.

Also, a member of staff of the GWCL who retired on a lower rank under Act 247 in 2018 received GH¢61,410.56, after contributing for 405 months.

They both worried why a new law that permits them to benefit more from the pensions system would make its contributors and retirees rather worse off.

“It is pathetic and everybody should come on board for us to look at it. Is this what we want for people who have sacrificed and given their all for their country?” one of them quizzed.

Response from SSNIT, NPRA and Trade Union Congress

The Social Security and National Insurance Trust (SSNIT), National Pensions Regulatory Authority (NPRA), and the Trade Union Congress (TUC) were contacted in separate interviews on the matter.

Though they all indicated their awareness of the disparity in pensions benefits under Act 766 and Act 247, they assured that they were teaming up with the government to address the situation.

The Director-General of SSNIT, Dr. John Ofori Tenkorang, indicated that the disparities were however due to what he describes as “transitional challenges”.

According to him, his outfit was notified of a letter from the government that pledged to increase the disparities in what a pensioner would have received as a benefit under Act 247 and what the contributor truly received under Act 766.

“After this transition period, the simulations show that everybody’s Past Credit and tier two will outstrip whatever he or she would have got under Act 247. Also, the lifetime pension benefits under Act 766 are better than under Act 247, and that is an undisputed fact,” Dr. Tenkorang said.

He added, “I have directed my team to work out those differences for us to submit to the Cabinet,” he said.

The implementation and regulation of the tier three pensions scheme under Act 766 which started in 2010 was greeted as the finest stake to guarantee retirement income security through pension savings yet its implementation has been riddled with various delays and challenges for contributors and pensioners.