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TUC criticises NPRA over pension reforms

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Mr. Kofi Asamoah - TUC Secretary-General
Mr. Kofi Asamoah – TUC Secretary-General

The Trades Union Congress (TUC) has taken a swipe at the National Pension Regulatory Authority (NPRA) for failing to carry out adequate public education on the new pension reforms.

Addressing journalists in a day’s workshop in Takoradi on Tuesday, Mrs Rose Kwei, Head of the Informal Economy Desk of TUC, said NPRA had failed in its mandate of sensitising the public on the new pension Act, (Act 766) passed in 2008 therefore most people in the country are uninformed about the law.

NPRA is mandated to sensitise the public on matters concerning the various pension schemes, receive and investigate complaints of impropriety in respect of the management of pension schemes.

Mrs Kwei entreated the media to support the education drive to educate and sensitise the public on the new pension reforms since it affects the very future of every Ghanaian.

She said government passed the National Pensions Act, 2008, (Act 766), to reform the old pension law PNDCL 247 to ensure retirement income security for employees.

This culminated in the introduction of a contributory three-tier Pension Scheme that took off in January 1, 2010.

Employers under the new pension Act were required to remit 13.5 per cent of workers earnings to the Social Security Scheme within 14 days after the end of the month to the Trust.

In addition, the employee would contribute 5.5 per cent of his or her earnings to the second-tier scheme that would be managed by a fund manager thereby bringing the total contributions of workers to 18.5 per cent.

The two-tier pension is a mandatory fully-funded and privately managed occupational scheme while the third-tier is a voluntary fully-funded and privately managed provident fund, especially for workers in the informal sector.

Mrs Kwei said the new pension reforms aimed at unifying all existing public schemes, including CAP 30 within a period of five years from the commencement of the law.

She said NPRA a regulatory body is suppose to regulate and monitor the operations of the entire schemes and ensure effective administration of pensions.

NPRA would be responsible for ensuring compliance with the Act, registration of occupational pension schemes, provident funds and personal pension schemes.

It would also approve, regulate and monitor trustees, pension fund managers, custodians and other institutions that deal with pensions as the Authority may determine.

The Authority would regulate and monitor the implementation of the Basic National Social Security Schemes, carry out research and ensure the maintenance of a national data bank on pension matters.

The Pensions Act required that employers register their establishments with SSNIT, ensure that all their workers are registered with the Scheme as well as ensuring that newly registered workers are issued with Social Security Reference Numbers.

Mrs Kwei noted that the minimum age at which a person could join the Social Security Scheme is 15 years while the maximum age is 45 years.

It also required that no employer transfers or uses the Social Security number of one worker for another.

She said the Act required that no employer paid contributions less than 13.5 per cent of the approved monthly equivalent of the national minimum wage even if the employee earned below the minimum wage.

Ghanaian workers for far too long had complained about poor retirement package thereby necessitating a new pension reforms for better retirement gratuity for both public and private workers.

Source: GNA

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