NPRA targets 40% pensions for informal workers by 2026
The National Pensions Regulatory Authority (NPRA) has launched a five-year strategic plan aimed at increasing pension coverage, growing the assets of the private pension contributions, sustaining the national basic pension scheme and improving the image of the authority.
Among other things, the plan aims to take pensions to all the 11 million workers in the formal sector while increasing coverage in the informal sector from the current three per cent to 40 per cent by 2026.
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It also aims to raise the total assets under management (AUM) of private pensions from the current GH¢30 billion to GH¢50 billion.
The plan will take effect next year after which the NPRA will implement programmes and initiatives aimed at realising the overall objective of “a visible NPRA, increasing coverage and growing pension assets for national development.”
Strategies
The Director General of the NPRA, Mr Hayford Attah Krufi, said at a press conference last Wednesday that the authority had developed a range of initiatives that would help to increase coverage, raise public trust in and appreciation of pensions and endear the NPRA more to the general public.
He said as part of the plan, the authority had developed and launched the Micro Pension Policy (MPP) aimed at subscribing more people in the informal sector on to the pension scheme.
He added that it was worrying that out of the more than nine million workers in the informal sector, only 560,000, representing three per cent, were known to have pension.
Mr Krufi added that the development exposed the larger chunk of the population to insecurity upon retirement while denying the economy of patient capital through contributions for development.
He said the MPP was meant to raise the coverage to 40 per cent by using the groups, unions and umbrella bodies of those institutions to sign them on to pensions.
Cocoa pensions
He mentioned the cocoa farmers pension scheme, which the authority partnered the Ghana Cocoa Board (COCOBOD) to develop, as one such efforts meant to bring pensions to informal sector workers.
He said the implementation of the scheme would start in “October this year during which about 400,000 farmers are expected to be covered.”
He also encouraged individuals to patronise pension as it was the surest way to secure their retirement income.
Recoveries
On the formal sector, Mr Krufi said the authority was achieving tremendous success in its efforts to get employers pay the pensions contributions of their employees.
He said the NPRA was currently prosecuting 15 firms that had failed to pay their workers contributions.
“Since July 2020, the authority has issued notices of intention to take legal action against 60 defaulting employers as a final reminder to make good their indebtedness or face prosecution. The response to the final demand notices has been encouraging since about 70 per cent of the defaulting employers who received the demand notices contacted the NPRA and made good either all of their indebtedness or made partial contributions to cover their employees. Some entities also submitted payment plans,” he said.
He disclosed that more than GH¢6.2 million had also been recovered from other defaulting employers under a campaign by the authority to ensure total respect for the pension laws.
He said pension was so crucial to the wellbeing of employees and national development such that seriousness must be attached to it by all.
To help deepen knowledge on pensions, Mr Krufi said the NPRA had set up a National Pension College to train players in the rudiments of the sector.
He said the college commenced operation in May 2021 and had since registered 79 people.
“Forty-nine of them are mainly trustees from various institutions and have already been trained and awarded certificates. This is a sign of good progress and we are hoping to see more people getting trained in pensions to ensure an effective, reliable and efficient pension system in Ghana,” he said.
He explained that the pensions training programme was not only for the players in the industry but for anybody interested to know and understand the rudiments of pensions and thus encouraged people to take interest in the college by enrolling for training.