Gloomy pension future for 90% of Ghana’s private sector workers

Hayford Attah Krufi

Most of the people employed in Ghana, work in the private sector. Some 85 per cent of all people employed, work in that sector, but they have no pension future, according to the National Pensions Regulatory Authority (NPRA).

The NPRA says 85 per cent of the working population in Ghana are found in the private sector.

“Out of this figure, only one per cent is on one form of pension scheme or the other,” Hayford Attah Krufi, CEO of the Authority told journalists at a sensitization workshop last week.

“Despite the huge efforts by the Authority to whip up the interest among the Ghanaian working populace especially those in the informal sector, to enrol on pension schemes, the figures are still not encouraging, by way of, understanding and participating in pension schemes,” he said.

The World Bank had pointed out in 2018 that 20 per cent of Ghana’s population will in the future need old age support requiring higher expenditure in social security.

The then Ghana Country Director of the Bank, Henry Kerali said the World Bank’s analysis indicates that the Social Security and National Insurance Trust (SSNIT) is currently spending about one per cent of GDP on providing pensions, which support about 0.4 per cent of the population.

“This does not include other pension spending in Ghana for retirees of some of the public services. 20 per cent of Ghana’s population will in future need old age support, this will require a proportionately higher expenditure. It is therefore critical to take a close look at what changes might be made now, before workers join the system with the expectation of a pension upon retirement,” he said.

Mr. Krufi stated that the current situation is not acceptable and urges urgent and drastic action in order to bring the informal sector worker onto pension schemes.

He also noted that there has also been a steady growth in pension funds under the reforms.

“As at December, 2018 the Total Pension Fund has increased from about GH¢20.7 billion in 2017 to GH¢22.2 billion in 2018. This is made up of GH¢13.1 billion of Assets Under Management (AUM) for Private Pension Funds and GH¢9.1 billion of funds under the 1st -Tier scheme,” he said.

Admitting that a lot of work must be done to sensitise Ghanaians to invest in their retirement, he said the Authority will provide the assistance and support for citizens to enrol on pension schemes so they can enjoy comfortable and stress-free retirement.

“My office has therefore mapped up a strategy to help address this looming national challenge before it gets out of hand,” he assured.

He however said the Authority has started prosecution of companies that are not paying their employees’ pension contributions.

“As you might be aware, the Authority has been given prosecutorial powers to prosecute defaulting employers. I mean employers who fail to pay pension contributions of their employees. In the light of this we have successfully trained some of our staff and our legal department has started processing persistent offenders for prosecution.

I can confirm that we are preparing to prosecute 13 defaulting employers and it is our ambition to continue to prosecute more who flout the laws to protect the interest of workers and secure their future,” he said.

Mr. Yaw Boadu-Ayeboafo, the Chairman of the National Media Commission urged journalists to be knowledgeable about subjects they want to write about and encouraged the participants to show interest in pension matters.

Mr. Roland Affail Monney, the President of the Ghana Journalists Association, told the journalists to learn to specialize, especially, to report on pension issues. He also indicated that the Association will be given awards on pension reporting category.

By Emmanuel K. Dogbevi

Copyright ©2019 by Creative Imaginations Publicity
All rights reserved. This article or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in reviews.

Leave A Reply

Your email address will not be published.