The National Pension Regulatory Authority (NPRA) has launched a nationwide pension’s awareness week to ensure the full participation of formal and informal sector workers in the national pension scheme and guarantee their income security after retirement.
The campaign is expected to help create awareness on pensions as a way of increasing pension coverage and provide a platform for engaging stakeholders in the development of Ghana’s pensions industry.
The launch was done in the Eastern Regional capital, Koforidua, as part of the globally observed international pensions awareness week celebrations that are held in September and October every year.
In a speech read on his behalf, Mr. Ken Ofori-Atta, the Minister of Finance, encouraged stakeholders to help inform citizens on matters relating to pensions for the industry’s growth and for ensuring pension income security for retired workers.
Despite COVID-19 adverse impact on Ghana’s economy, he said the pension industry registered steady growth in 2020 as total pension assets under management grew from GH¢26.3 billion in 2019 to GH¢33.4 billion in 2020.
This was attributed to the strong performance of the basic national social security scheme (BNSSS) and the private pension scheme.
The BNSSS ended the year 2020 with assets worth GH¢11.3 billion, representing about 26 per cent growth from the previous year.
While, the private pension funds ended the year with GH¢22 billion worth of assets under management, representing an improvement of 24 per cent from the previous year.
Mr. Ofori-Atta said Ghana’s informal sector pension coverage stands at 6% of total pensions in an economy where approximately 80% of the workforce is in the informal sector.
The trend implies a high dependency rate as only a few people contribute to tier one and tier two as well as tier three schemes.
He also said over 90 per cent of pension assets were in government and related securities and bank deposits, noting: “This trend is not capable of leading the economic transformation agenda being pursued by the government.”
Thus, he said Government was taking steps to change the trend and laying the foundation for channelling pension funds through the capital market to bring about transformational economic growth.
He added that the Finance Ministry was establishing a financial sector data centre to eliminate information asymmetry in the sector.
He said the policy action was being complemented with the establishment of a domestic credit rating agency to, among other objectives, redirect long term funds to the capital market.
Mr. Hayford Attah Krufi, Chief Executive Officer, NPRA, said the national pension awareness week was part of the Authority’s quest for robust institutional visibility and income security for workers after their retirement.
He said since Ghana embarked on pension reforms some few years back, there had been several efforts to get every Ghanaian worker onto the pension ladder.
“We do not want to leave out any Ghanaian adult worker who is able to work and earn income, he or she has a right to earn a decent pension,” he said.
He said the essence of the week was to give every worker, both formal and informal, the benefit of the national pension reforms which commenced in 2010.
Mr. Ignatius Baffour Awuah, Minister of Employment and Labour Relations encouraged the informal sector community to patronise the pension scheme for decent pension income and security.
He said pension was not reserved only for only formal sector workers but for all people who also work outside the formal sector and urged every worker to patronise in the pension scheme as well as have trust in the activities of NPRA.
The national pension awareness week celebration is viewed as a complementary action that would contribute significantly towards achieving objectives of the new policy direction being pursued by the government.