Second Tier Pension Scheme Operational

Ms Mary Mandy, Corporate Affairs Officer of Social Security and National Insurance Trust (SSNIT), has urged organizations to register with the National Pensions Regulatory Authority, to enable their workers to benefit from the second tier pension scheme. She said although the deadline for the registration of the mandatory fully-funded and privately managed occupational scheme had elapsed, organizations, which did not register could facilitate the process to allow workers to benefit from the scheme. Ms Mandy was speaking at the just-ended National Executive Committee meeting of the Communication Workers Union of the Ghana Trades Union Congress, in Accra. The second tier occupational (or work-based) pension scheme is mandatory for all employees, but privately managed and designed primarily to give contributors higher lump sum benefits than presently available under the SSNIT or Cap 30 pension schemes. In 2010, Government introduced the new three-tier pension scheme, to enhance pension benefits and increase the retirement income security of workers both in the formal and informal sectors. The new scheme was also to make available much needed long-term funds for the development of the economy. All workers currently on the SSNIT scheme and below 55 years, would automatically join the new scheme. However, workers aged 55 years and above would be exempted but have the option to join the new scheme. Ms Mandy noted that under the new National Pensions Act, 2008 Act 766, a worker contributes 5.5 per cent of his/her basic salary and the employer adds 13 per cent of the worker’s basic salary, making a total of 18.5 per cent. “Out of the 18.5 per cent the employer shall remit 13.5 per cent within 14 days after the end of each month to SSNIT. Subsequently, SSNIT also remits 2.5 per cent out of the 13.5 per cent to National Health Insurance Authority for member’s Health Insurance and the remaining five per cent goes to the second tier pension scheme,” she said. Ms Mandy said the second tier mandatory scheme and the voluntary third tier would be privately-managed by approved Trustees licensed by the Regulatory Authority with the assistance of pension fund managers and custodians registered by the Authority. She said the trustees would be entrusted with the overall responsibilities for the administration and management of the privately-managed second and third tier schemes. Ms Mandy said they could delegate administration to third party service providers; who would not have access to pension funds, and would also be responsible for appointing pension fund managers, custodians and other service providers as well as ensure their compliance with regulatory requirements. She advised workers to give their appropriate and detailed particulars to the SSNIT office to assist them work on their retirement benefits on time. Ms Mandy said at times when people change their names, date of birth and next of kin they fail to notify the SSNIT office and that normally cause the delay in obtaining their benefits. She advised that workers who area 54 years and above to fill the blue form to enable them get their blue membership card, which would facilitate work on their pension benefits. Mr Kofi Asamoah, General Secretary of Trades Unions Congress, Ghana (GTUC), asked the NEC members to be committed to the course of the Union and expand their horizon through learning and experience on the job. He asked the CWU to woo new membership, saying “there are huge numbers of workers, who are not unionize and our work should be extended to non-formal sectors to achieve the numbers. As we all know in unionism is numbers that count and I will urged all executives to assist the secretariat to achieve that goal”. Mr Asamoah said: “nobody was born a union activist but training yourselves and learning from experience, unionists are the surest way to get there,” he said and urged the CWU Secretariat to allocate budget for training of its members. “I urged you to be critical on issues and offer good suggestions that will be beneficial to the union. Begin to think of what kind of welfare benefits to put in place to assist your members,” he said.