Pension funds accrue GH¢2.1bn
An amount of GHc2.183 billion has accrued since January 2010 from the second-tier pension scheme, the National Pensions Regulatory Authority (NPRA) has said.
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Out of the amount, GHc1.64 million represents total contributions from both public and private sector employees and returns on investment, while GHc542.72 million represents funds being managed by the scheme operators.
Addressing a press conference in the wake of the controversy surrounding the second-tier pension scheme, the Chief Executive Officer of the NPRA, Mr Laud Senanu, said the transfer of the contributions to registered schemes was expected to begin in December 2014, after an audit of the accounts had been completed.
The management of the second tier pension scheme has become the bone of contention between 12 labour unions and the government.
While labour insists on appointing its own trustees, the government has appointed Pension Fund Alliance as trustees over the second-tier pension.
According to Mr Senanu, the transfer of the Temporary Pension Fund Account (TPFA) to the various registered schemes would begin by December 2014.
“The NPRA wishes to assure employers, workers and the general public that all contributions made in January 2010 into the TPFA are safe and intact.
“Once the audit exercise is completed, transfers to the various registered schemes will begin, hopefully by December," Mr Senanu said at the event, which was used to address recent concerns by workers and the government on the pension funds.
The issues
About 12 labour unions are currently on an indefinite strike in protest against the government's decision not to allow them to manage their tier-two pension funds.
Under the new pension law, the National Pensions Act, 2008 (Act 766), the Social Security and National Insurance Trust (SSNIT) gets 13.5 per cent from contributors, while five per cent goes to the second-tier operators to be managed by corporate trustees on behalf of contributors — employees of public and private institutions.
Although the law was passed in 2008, it took effect in 2010, within which it mandated employers to deduct five per cent of their employees' monthly salaries and pay it into a TPFA at the Bank of Ghana (BoG).
The account was to absorb the contributions in the meantime, while the NPRA, which is the regulator of the pension industry, put up the right regulatory framework, licensed the trustees and registered them for actual work to start.
The Minister of Employment and Labour Relations, Mr Haruna Iddrisu, explained recently that the government could not entrust the management of the pension scheme into the hands of the workers unions.
The unions have, however, vowed to call off their strike only if the government releases the money that has accrued from their tier-two pension fund into their various schemes.
The Attorney-General, on October 24, 2014, sued the workers on behalf of the government, asking the Accra High Court to declare the indefinite strike illegal.
A statement of claim accompanying the suit prayed the court for an order to compel the unions to call off the strike and resume work.
Breakdown of funds
The CEO of the NPRA explained that the authority had received GHc1.01 billion, being contributions between January 1, 2010 and October 27, 2014, from SSNIT, on behalf of the private sector, and the Controller and Accountant-General’s Department (CAGD), on behalf of public sector workers.
The SSNIT collections, he said, amounted to about GHc488.77 million, while that of the CAGD totalled about GHc521.89 million.
To reconcile information provided by employers and enable the generation of the statements of members to the scheme, Mr Senanu said the accounting and auditing firm, PwC, had been engaged to audit the data, after which the funds would be disbursed to the respective trustees for management.
The firm was engaged in April this year, he said, adding that its final report was expected by today October 31, 2014, after which the various stakeholders, including fund administrators, the CAGD and corporate trustees would meet to deliberate on the transfer of the funds.
He asked workers to exercise restraint as the NPRA executed its mandate under the law.
Employers under second tier
Touching on the registered number of employers, Mr Senanu said about 10,000 employers had registered for the second-tier scheme, instead of about 35,000 eligible employers.
Explaining the legal basis of the TPFA, Mr Senanu said the National Pensions Act, 2008 (Act 766) mandated every employer to open a Temporary Occupational Pension Fund Account with the Bank of Ghana to hold the five per cent of the second tier.
However, he said due to the fact that the Bank of Ghana did not have branches all over the country, stakeholders agreed to give SSNIT the mandate to collect the five per cent contributions on behalf of the employee from the employer.
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