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IMANI - Where Is Our Pension Money?   
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In September 2009, the Board of the National Pensions Regulatory Authority (NPRA) was set up to oversee the implementation of the National Pensions Act, 2008 (Act 766).

The Act seeks to create a unified pension system under a three tiered pension structure, with SSNIT as the manager of the First Tier, and Approved Trustees (Corporate & Individual Trustees) as operators of the mandatory Tier 2 and Voluntary Tier 3 schemes.

In January 2010, the Temporary Pension Fund Account (TPFA) was set up to provisionally administer Tier 2 contributions pending the licensing of Trustees and the registering of Pension Schemes. Employers, from January 2010, remitted 5% (Tier 2 contributions) of their employees’ salaries to the TPFA. This continued for most employers till October 2012.

In October 2011, the NPRA issued the needed administrative guidelines to make way for the full implementation of the Act. Private companies - Corporate Trustees, Fund Managers and Pension Fund Custodians - purposely established to fully administer the Tiers 2 and 3 schemes were licensed by the NPRA on March 16, 2012.

The NPRA finally, after almost three year’s wait without much information to workers and service providers, registered Pensions Schemes at the end of October 2012. Full implementation under of the reforms - Act 766 - thus started in November 2012.


The NPRA did indicate, in their Public Notice on their website in October 2012 that accrued benefits and contributions paid into the TPFA would be remitted to Trustees chosen by employers, starting January 2013. This has not happened up till now.

One of the serious implications of this situation is that people who were 54 years and younger when implementation started in January 2010 risk not getting their lump-sum benefits, upon retirement at 60. This is because over 34months of their contributions into Tier 2 is still with NPRA. Note that the law exempted contributions for worker who were over 55 years of age when implementation started in January 2010.


Section 218(4) says that the Board of NPRA shall within 90 days of licensing Pension Fund Managers, Pension Fund Custodians and Trustees, compute and transfer the accrued contributions and returns in the TPFA to Occupational Pension Funds opened by Trustees of employers’ choice and registered by NPRA. Pension Fund Managers, Pension Fund Custodians and Trustees have been licensed since March 16th 2012, over 18 months now, and yet it took the NPRA till end of October 2012 to register Schemes. The NPRA has not complied with Section 218(4).


Though NPRA indicated that it was going to invest TPFA in Treasury Bills pending the registration of Pension Schemes, provisional statements released by NPRA in October 2012 indicated a return on investment of 2.75% per annum. This is disappointing given that the average Treasure Bill returns between January 2010 and October 2012 is around 15% per annum. Additionally the same provisional statement covered a period of 18months instead of the 34 months period (January 2010 to October 2012) over which contributions had been made into the TPFA.


Given that Pension Schemes have been registered by the NPRA as far back as October 2012, the NPRA should take immediate steps to transfer accrued contributions and benefits to registered schemes and their approved Trustees. I fully understand the operational challenges the NPRA may have encountered in getting thus far. However, this is no longer funny.

The wrong signal is being sent to employers who are yet to sign up to any of the three tiers. All Ghanaian workers should be very interested in this matter as each worker is directly affected. Sooner or later, we will all retire.
Source: Peacefmonline.com/Ghana

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