Government reaches agreement with labour on second-tier pension scheme

BY: Musah Yahaya Jafaru

The government has reached an agreement with labour on the management of the second-tier pension scheme, which has become a legal tussle between the two parties.

The agreement was reached based on the recommendations of a joint committee set up to find a workable solution within the context of the National Pensions Act, 2008 (Act 766).

Areas of agreement

Giving the highlights of the agreement at the meet-the-press series in Accra on Tuesday, the Minister of Employment and Labour Relations, Mr Haruna Iddrisu, said the government and workers had agreed that multiple schemes should be allowed to exist and operate based on the following variations.

First, the Board of Trustees of each scheme should be reconstituted with representatives from the government (employer) and workers. Another agreement is that the employer should nominate the Chairperson for each of the Board of Trustees of the four schemes.

The two fund managers would be appointed for each scheme, one to be nominated by the employer and one by the workers. Mr Iddrisu said another crucial agreement was that the employer should nominate the custodian for all the four schemes.

There was also a consensus that an independent trustee be nominated by the workers for approval by the Board of Trustees. Again, the composition of the various  Boards of Trustees should be proposed by the employer. There was also an agreement for some rules to be amended to reflect the proposals.

Scheme administration

The minister said for the smooth administration of the scheme, the government and workers had decided each scheme would have one scheme administrator.

He said the health sector, judicial service and CLOGSAG would be expected to nominate their own¡ administrator for three of the schemes.

For the education sector, he said the government would nominate one competent administrator.

“The forum had entertained the fear that its rank and file may not be satisfied if the Pensions Alliance Trust was solely selected by the government as trustees for the Educational Sector Scheme Administrator,” he said.

Post transfer issues

Mr Iddrisu said so far, more than GH¢2 billion for the two-tier pension scheme had been lodged with the Bank of Ghana, and indicated that the money had been invested and had yielded some returns.

He said the National Pensions Regulatory Authority had put in place a mechanism for resolution of post-transfer issues with the trustees.

Therefore, the minister said, members of the beneficiary schemes were requested to channel their concerns to their trustees through their employers.

He said currently, 18 applicants, made up of four master trust schemes and 14 employer-sponsored schemes were going through a due diligence compliance process after which their transfers would be effected.