Don’t pay tier-two contributions to SSNIT - NPRA
The National Pensions Regulatory Authority (NPRA) has urged all corporate entities, especially those in the private sector, to register pension schemes with a corporate trustee and pay the second-tier pensions deductions of their employees.
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According to the authority, both the first and second-tier pension contributions were mandatory and did not matter whether a company was private or sole proprietorship.
“The main issue is the second-tier occupational pension scheme; many companies think that since they have registered the first tier and able to pay both the first and second tiers, that will be all. So they have forgotten that they have to register the second tier separately from the first tier,” the Corporate Affairs Manager of the NPRA, Mr Emmanuel Awuku Dagbanu pointed out in an interview with the Graphic Business in Accra last Monday after the launch of Old Mutual Pensions Trust Ghana Ltd.
Register 2nd tier separately
Mr Dagbanu explained that although the big companies had all registered their second tier pension schemes separately, smaller businesses, usually with one-person ownerships, were found wanting.
Then there were those companies which had registered their second-tier schemes but still remitted the contributions to the Social Security and National Insurance Trust (SSNIT) instead of paying them to the custodial banks of the registered schemes, he said.
Mr Dagbanu said the NPRA was holding discussions and working closely with such employers to streamline the anomalies.
The corporate affairs manager said the NPRA had over the years issued guidelines and administrative directives to give clarity to the pension law, as well as help trustees, fund managers, custodians and other service providers to be compliant, warning that the authority would not hesitate to sanction any entity that flouted the legislation.
Old Mutual commended
Mr Dagbanu commended Old Mutual for launching its pensions trust company, saying: “We believe Old Mutual will bring its international expertise in managing sustainable long-term financial products and services to bear on the pensions industry in Ghana.”
The 171-year-old South African pensions and insurance service provider, Old Mutual, entered the country’s financial services industry by acquiring the insurance and pensions businesses of Provident Life.
Old Mutual launched its life insurance business about three years ago and consequently rebranded and re-energised Provident Pensions Trust which it relaunched as Old Mutual Pensions Trust Ghana Ltd last Monday.
Managing director on products
The Managing Director of the company, Mr George Kojo Addison, said the company was a master provider of pension management and administrative services to third tier and second tier defined pension contributions.
For a start, the company has introduced two broad schemes, namely the Provident Pension Plan Scheme for the second tier and the Master Trust Scheme for third tier contributions.
“Our Master Trust Schemes are designed as a pool of funds from various participating employers towards the payment of a lump-sum pension to their employees on retirement,” Mr Addison said, adding that the large pool of funds allowed members to benefit from economies of scale.
Mr Addison stated that Old Mutual Pensions Trust would liaise with companies, especially those that register their schemes with it for financial literacy programmes to help their employees manage their resources better.