Pension money
In recent times, the Social Security and National Insurance Trust (SSNIT) has been educating the public about the new pension law. The import is that under the new law pension beneficiaries who were 55 years or more before the new Pensions Act became operational must have their total contribution paid to SSNIT while those who were younger must have part paid to SSNIT and the other part paid to appointed trustees.
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The National Pensions Regulatory Authority (NPRA), on its part, has explained that by April, contributions it was holding through the transition period of establishing private pension trustees, and for which it had been accused of not managing efficiently, would be transferred to appointed trustees.
That will be done after reconciliation with SSNIT and audit by independent auditors.
Indeed, since the new law was underpinned by the need to ensure value for money for contributors in their days of pension, some even think that the process has delayed and contributors are being short-changed.
It is thus unacceptable that majority of employers have not registered their employee schemes with corporate trustees. The NPRA must facilitate the process so that it would not be held liable for any lapses.
But one question that has engaged some contributors, some of whom have been asking us at Graphic to help them understand is, what will happen to the portion that is usually paid as lump sum by SSNIT to contributors on retirement, for those moving into the hands of private trustees.
Will SSNIT value their accumulated contributions, and transfer the amount to the private trustees now or wait until they go on pension and then SSNIT will pay them that portion of the lump sum, while the private trustees pay what would have accrued after the new pension scheme became operational.
In this I want to play ignorant and be the devil’s advocate. What will happen to the lump sum portion due from SSNIT for a contributor who might have contributed for the minimum period of 240 months under the old scheme but who might have been 52 years at the inception of the new law, especially as the intendment of the law is to improve the benefits due contributors?.
There is an obligation on the part of both NPRA and SSNIT to explain issues and educate the public so that they will understand the equations involved. That will definitely set hearts at ease.
Following education on the two schemes by SSNIT for instance, there are agitations by some workers who do not qualify under the new scheme that the 0.5 per cent paid under the new scheme by employers to bring total contributions to 18 per cent must be paid to them as part of their basic salary every month since they must not be discriminated against, in any manner, as that is against the spirit and letter of our constitution.
There are also complaints from those who were under the old scheme who needed to contribute a minimum of 240 months to qualify for full pension and who have been lumped with new contributors who have to be on the scheme for 180 months to qualify for full pension. Just like those labourers in the bible who were hired in the morning and were paid the same as those hired in the evening asked whether it was fair, even when the hirer was a private person and had full control over his money, in this case, it is from their contributions, and, therefore, they are asking.
Therefore, NPRA and SSNIT must add to their public education what is to happen to accrued contributions with respect to the lump sum payment regime for those who were less than 55 years when the new scheme became operational.
Another question that some callers have asked us to find out for them is when NPRA will issue their personal statements of account on the funds it is holding, pending the transfers to the private trustees.
Equally, they want an answer to the fact that whereas an interest of just four per cent was what they were supposed to have earned for their contributions while the NPRA invested the funds in treasury bills of more than 20 per cent, averagely and whereas the NPRA has fixed the charges that private trustees could charge on the funds, they are to manage how come “charity did not begin at home” and the NPRA acted contrary to the guidelines for the operation of private pension trusts. Or is it the case of listen to what “I say but I am not to be bound by the laws I set”.
These are some of the nagging issues that as journalists, we have been bombarded with to find answers to but some of which are beyond our capacity. More important, we are contributors and some of us fall into both schemes.
Are those of us above 55 entitled to claim the 0.5 per cent paid by our employers towards our younger colleagues as part of our monthly salary and for those of us who are younger, where would our otherwise lump sum benefit from SSNIT be kept until we qualify for full benefit?
The ball is in the court of NPRA and SSNIT. As for me, I have discharged my obligation as an Okyeame or spokesman even if my style and language are inelegant. Let us set hearts at ease so that even if we live in the wilderness today we will reach the Promised Land with the education from NPRA and SSNIT.