Informal workers embrace pensions; 81,000 registered
The Union of Informal Workers Association (UNIWA) of the Trade Union Congress (TUC) is expected to register about 150,000 of its members onto a private pension scheme by the end of 2017.
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Already, the association, which represents the interest of workers in the informal sector, has registered 81,000 of its members on to the People’s Pension Trust, a corporate trustee of the association.
At a sensitisation workshop in Accra on September 11, the General Secretary of the association, Ms Deborah Freeman, said they had concluded negotiations with People’s Pension Trust to manage the funds of its members under the Tier 3 pension scheme, a voluntary provident fund and personal pension scheme supported by tax benefit incentives to provide additional funds for workers, especially those in the informal sector, during their retirement.
She explained that even though government had ensured major reforms in getting more people to save towards their pension with the passage of the Pension Act 2008, Act 776, workers in the informal sector were not aware of the possibilities of pensions in the informal economy under the Tier 3 pension schemes.
“Private pensions offer everyone a way to protect their retirement by saving through tax free vehicles customised to meet their needs,” she said.
Private trustees committed
The Chief Executive Officer of People’s Pension Trust, Mr Samuel Bediako Waterberg, told GRAPHIC BUSINESS in an interview on the sidelines of the workshop that his company was committed to the interests of UNIWA and through a partnership had registered a scheme designated for informal sector workers to save towards their future.
“What makes this scheme unique is that it is linked with the Trades Union Congress (TUC) which seeks the interest of its members and that gives them security and assurance that their contributions are safe,” he said.
He explained that under the scheme, a flexible contribution plan tailored to meet the cash flow of workers in the informal sector was designed to allow everyone to contribute towards his or her retirement.
THE Union of Informal Workers Association (UNIWA) of the Trade Union Congress (TUC) is expected to register about 150,000 of its members onto a private pension scheme by the end of 2017.
Already, the association, which represents the interest of workers in the informal sector, has registered 81,000 of its members on to the People’s Pension Trust, a corporate trustee of the association.
At a sensitisation workshop in Accra on September 11, the General Secretary of the association, Ms Deborah Freeman, said they had concluded negotiations with People’s Pension Trust to manage the funds of its members under the Tier 3 pension scheme, a voluntary provident fund and personal pension scheme supported by tax benefit incentives to provide additional funds for workers, especially those in the informal sector, during their retirement.
She explained that even though government had ensured major reforms in getting more people to save towards their pension with the passage of the Pension Act 2008, Act 776, workers in the informal sector were not aware of the possibilities of pensions in the informal economy under the Tier 3 pension schemes.
“Private pensions offer everyone a way to protect their retirement by saving through tax free vehicles customised to meet their needs,” she said.
Private trustees committed
The Chief Executive Officer of People’s Pension Trust, Mr Samuel Bediako Waterberg, told GRAPHIC BUSINESS in an interview on the sidelines of the workshop that his company was committed to the interests of UNIWA and through a partnership had registered a scheme designated for informal sector workers to save towards their future.
“What makes this scheme unique is that it is linked with the Trades Union Congress (TUC) which seeks the interest of its members and that gives them security and assurance that their contributions are safe,” he said.
He explained that under the scheme, a flexible contribution plan tailored to meet the cash flow of workers in the informal sector was designed to allow everyone to contribute towards his or her retirement.
Pension reforms
The current three-tier pension system enacted into law in 2008 demands employers to register their staff under a first-tier basic pension scheme managed by SSNIT and a second-tier work-based scheme that is privately managed and is expected to give contributors higher lump sum benefits than presently available under the SSNIT or Cap 30 pension schemes.
The third-tier is voluntary and includes provident funds and personal pension schemes designed largely for informal sector workers and entrepreneurs.
The reforms, which ended the monopoly of the Social Security and National Insurance Trust (SSNIT), were hailed as a major step toward improving the retirement conditions of workers through competition that will maximise the returns earned on pension investments.
Under the pension law, government through SSNIT will offer everyone who contributes to SSNIT a fixed monthly payment upon retirement; however, for most retirees that is not enough, and that makes the tier-three contributions a novelty.
The pensions industry, according to National Pensions Regulatory Authority (NPRA), has a total of 131 service providers including trustees, pension fund managers and custodians, with 243 registered pension schemes operating.
The current three-tier pension system enacted into law in 2008 demands employers to register their staff under a first-tier basic pension scheme managed by SSNIT and a second-tier work-based scheme that is privately managed and is expected to give contributors higher lump sum benefits than presently available under the SSNIT or Cap 30 pension schemes.
The third-tier is voluntary and includes provident funds and personal pension schemes designed largely for informal sector workers and entrepreneurs.
The reforms, which ended the monopoly of the Social Security and National Insurance Trust (SSNIT), were hailed as a major step toward improving the retirement conditions of workers through competition that will maximise the returns earned on pension investments.
Under the pension law, government through SSNIT will offer everyone who contributes to SSNIT a fixed monthly payment upon retirement; however, for most retirees that is not enough, and that makes the tier-three contributions a novelty.
The pensions industry, according to National Pensions Regulatory Authority (NPRA), has a total of 131 service providers including trustees, pension fund managers and custodians, with 243 registered pension schemes operating.