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Government ‘Hot’ Over GHC2bn Pension Funds   
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It appears government has no money to pay six years accumulated tier-two pension money owed public sector workers.

An emergency meeting summoned at Flagstaff House yesterday by President John Dramani Mahama to avert a strike action by 12 labour unions ended inconclusive.

Sources familiar with what transpired at the meeting yesterday, told The Finder that the unions stuck to their guns since government assurances were not satisfactory.

Consequently, the sources said member unions of the Forum for Public Sector Registered Pension Schemes would hold a crunch meeting this afternoon.

According to the sources, who do not want to be named, at the end of this afternoon’s meeting, the Forum is likely to declare an indefinite strike.

Two weeks ago, the Forum warned that if their 2nd-Tier pension contribution of 5% for the month of October was not credited to their accounts by close of work Monday, November 14, 2016, they would embark on an indefinite strike from yesterday.

To avert the strike, President Mahama summoned a meeting yesterday afternoon which ended inconclusive.

GH¢1.6bn accrued as at 2014

When the Forum embarked on strike in 2014, the Chief Executive of the National Pensions Regulatory Commission (NPRA), said the amount accrued since the coming into effect of the new pensions law in 2010 is estimated at over GH¢1.6bn.

The breakdown of the GH¢1.6bn is as follows: GH¢522m being contributions from private sector workers, originally paid to the Social Security and National Insurance Trust (SSNIT) and later transferred to the Bank of Ghana (BoG), GH¢490m being public sector workers’ contributions paid to the Controller and Accountant General’s Department (CAGD) and then transferred to the BoG, and investment income of GH¢600m from the two sources.

This figure is far greater than the figure of GH¢440m that Mr. Haruna Iddrisu, the Minister of Employment and Labour Relations, indicated had accrued at press briefings in 2014.

GH¢200m not paid by govt in 2014

NPRA Documents presented to Parliament in 2014 and sighted by the media stated that the CAGD had “failed to transfer more than GH¢200 million of workers’ pension contributions” into the Temporary Pensions Fund Account (TPFA).

It was also reported that contributions collected by the SSNIT between June and September 2014, had also not been deposited into the TPFA.

Bank Transfer Advices (BTAs) to CAGD as on October 27, 2014, showed that the total contributions outstanding amounted to GH¢269,269,105.79, but this excluded contributions for August and September 2014, for which BATs have not been issued.

Moreover, this amount did not include interest on the delayed and unpaid contributions.

If the strike takes effect, public schools, hospitals and government machinery face total shutdown tomorrow.

By law, the 5% 2nd-Tier pension contribution for the previous month is to be paid within 14 days of the following month.

The workers expected to receive notification from their bankers by close of work Monday, indicating that their 5% 2ND-Tier pension contribution has been credited to their accounts by the Controller and Accountant General but that did not happen.

October 5% must hit their accounts

Aside the October contribution, the Forum is also requesting government to transfer all the monies that have accumulated in a temporary account at Bank of Ghana (BoG) into their accounts immediately.

Forum registered 3 pension schemes

The Forum has registered three pension schemes for Civil and Local Government Staff Association (CLOGSAG), Health Sector and Education sector.

The National Pensions Regulatory Authority (NPRA) has issued the three schemes fresh licenses to operate.

15-member board of trustees

The schemes are managed by a 15-member board of trustees, comprising nine members representing workers, five government representatives and one independent member with knowledge in the management of pensions, as required by law.

Under the new pension law, the National Pensions Act, 2008 (Act 766), the Social Security and National Insurance Trust (SSNIT) gets 13.5% of contributor’s contributions, 5% goes to the second-tier operators to be managed by corporate trustees on behalf of contributors — employees of public and private institutions.

Law took effect since 2010

Although the law was passed in 2008, it took effect in 2010, within which it mandated employers to deduct 5% of their employees' monthly salaries and pay them into a Temporary Pensions Fund Account (TPFA) at BoG.

The account was to absorb the contributions 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.

Mr Tenkorang said NPRA called them to say the Ministry of Finance has promised to instruct the Controller and Accountant General to credit their accounts with the money.

No more promises

The Forum has decided not to entertain any promise from government officials because, in the Memorandum of Understanding (MoU) that made the Forum to call off its earlier strike, government promised to transfer the accumulated amount in Temporary Pensions Fund Account (TPFA) at BoG into the accounts of the three schemes registered by workers in April, this year.

In addition, government at the time promised to start crediting their accounts with their monthly deductions by July, this year.

However, government failed to deliver on both promises necessitating the pending strike action.

5% to be invested not below T-Bills rate

In addition, government will have to breakdown the figure to show how much was invested during the period and how much interest accrued from the investment.

This is crucial because, the law states that the money should be invested to yield interest rates not less than Treasury Bill rates.

With the promulgation of the National Pensions (Amendment) Act, 2014 (Act 883), the government postponed the implementation of the 2nd-Tier Occupational Pension Scheme for five years and that cut out those who were 55 years as at January 1, 2015.

The fact still remains that for those who fall under the National Pensions Act, 2008 (Act 766), cumulative contributions from January 1, 2010, have not been transferred to the custodian banks of licensed schemes of the Forum.

Adverse effect on pensioners

The delay in the transfer of the funds to the various schemes is going to adversely affect on the level of lump sum or gratuity a retired officer is likely to receive in the 2nd-Tier.

Case for strike

Making a case for the strike, the Forum said many Ghanaians were aware of the debilitating conditions that pensioners found themselves after having diligently served the nation for many years.

“We all know the extent of control the government of Ghana wields power over the Social Security and National Insurance Trust (SSNIT) and how the government has contributed, over the years, to the inefficiencies and mismanagement of SSNIT through political interference.

“It is because of these scary conditions at retirement that pushed workers to agitate for pension reforms and which were wholeheartedly embraced by the government of the day. To the architects of the three-tier pension scheme, it was crafted to insulate excessive governmental interference and to engender peer competitions among the existing schemes so as to promote efficiency,” the Forum added.

Appointment of Pension Alliance Trust

The government claims the workers had agreed that Pension Alliance Trust would manage the funds.

But the workers described as complete falsehood claims by the Minister of Communications that workers had a hand in the appointment of Alliance Trust to manage the tier-two scheme of public sector workers.

As the issues dragged on, the government went to court to obtain an ex-parte order on the Forum.

The court directed the leadership of the unions to ensure an immediate end to the indefinite strike and return to work with their respective members which they obliged.

Government and workers opted for out of court settlement resulting in the signing of a Memorandum of Understanding (MoU) to resolve the issues at stake.

Now the 12 unions have threatened strike again because government failed to implement the MoU.
Source: The Finder

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