Public sector workers have threatened to go on strike over the inability of the government to transfer second tier pension funds due them to their respective fund managers.
The threat is the latest attempt by the public sector workers, made up of unions and associations in the health services, education, local government and Judicial Service staff, to get their funds released to be managed for higher returns.
The Temporary Pension Fund Account (TPFA) with the Bank of Ghana (BoG) was created because the structures to implement the new Pensions Act were not ready when the law kicked in. The early leadership of the National Pensions Regulatory Authority (NPRA), in consultation with the government, decided to lodge all deductions from public sector workers in the TPFA to be managed by the BoG until such time that schemes were set up and registered with certified fund managers and corporate trustees for the funds to be transferred.
However, since then, substantial amounts continue to be lodged in the TPFA and public sector workers believe, and rightly so too, that it is a waste of resources and that the funds must be immediately released to them.
According to the NPRA, some GH¢2.7 billion, made up of contributions and returns, remained in the TPFA as of the end of June this year. The funds include about GH¢2.2 billion for public sector workers who draw their salaries from the Controller and Accountant-General’s Department (CAGD).
This is against the total assets under management (AUM) by licensed trustees which stood at GH¢8.3 billion.
Even though there is no basis for comparison between the TPFA and the AUM, the Daily Graphic believes that the rate of returns on funds lodged in the TPFA is rather low, compared to returns on the AUM portfolio.
The new pension regime was mooted because of the low returns workers got by joining the compulsory first tier pension funds managed by the Social Security and National Insurance Trust (SSNIT) which used to be the sole compulsory pension for workers in the country.
Under the pension reforms, all workers in the public, private and informal sectors of the economy were catered for. With formal sector workers everywhere having the compulsory right to enjoy both the first and the second tiers, workers are assured of decent pensions, as they can monitor and assess how much they are worth under the second tier pension fund.
This is why the Daily Graphic supports public sector workers in their quest to get the funds transferred to their respective fund managers.
The Daily Graphic shares the view that the government should reciprocate the goodwill workers demonstrated when they agreed to an out-of-court settlement in February last year.
We also urge the relevant government outfits, including the Ministry of Finance, the Labour Ministry, the BoG and the NPRA, to work closely with public sector workers to resolve the impasse before the aggrieved workers carry out their threat.
This will help maintain a calm and cordial industrial front, which is necessary for development and progress.