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The Tier 2 Pension controversy, which has compelled an amalgamation of associations within the health and education sectors as well as judiciary and the civil service to embark on an indefinite strike, is taking a new twist, as labour claims the funds have accrued to GH�2 billion. The Attorney General has already gone to court, seeking a declaration that the strike action is illegal, but the striking workers have called the bluff of government, insisting that they are also ready for court. The government last week announced that the Temporary Pension Fund Account (TPFA) or the Tier 2 Pension funds, which is being held in trust for workers at the Bank of Ghana, had accrued to about GH�450,000 million. However, unknown to both the Minister and Deputy Minister of Employment and Labour Relations, Haruna Iddrisu and Baba Jamal, respectively, who had disclosed the figure at a news conference, the then Deputy Minister of Finance, Fiifi Kwetey, had said somewhere in December 2013 that the Pension Fund had accrued to a whopping GH�1.2billion since 2010. Interestingly, the government, through the central bank, is said to have calculated the amount at 2.2% to arrive at the GH�450,000 million instead of the Treasury Bill Rate of 15 plus 2% at the time and when Baba Jamal was told that Fiifi Kwetey, now the Minister of Agriculture, had mentioned a higher figure, he said the media could �go� with the higher figure. It was unclear why the BoG decided to calculate the interest rate at 2.2% instead of the prevailing TB rate which has currently reached 24% in addition to 2% as the negotiated price, making it 26%. The workers are even speculating that the Tier 2 Pension funds have reached almost GH�2 billion, going by the prevailing TB rate, since they claim the interest itself accumulated additional value. The workers say the Pension Trust Alliance is being foisted on them by the government, stressing that they have the right to select where they want to invest their funds. Sources say the government has been reluctant to allow the workers to singlehandedly select their own fund managers due to the risks involved, after it realised that the amount is getting huge by the day and it feared once the money gets into the hands of private fund managers, they may be financially powerful. Another reason is that government is not ready to pay the actual interest pegged at the prevailing TB rate of 24% plus 2%. However, the workers have reiterated their resolve to stick to the fund managers of their choice who are already registered with the National Pensions Regulatory Authority (NPRA), asking the government to desist from undue interference. IMANI On Fortiz As the strike entered its second week, policy analysis think-tank IMANI Ghana has taken on Fortiz, a private equity fund which controversially bought state-owned Merchant Bank, now Universal Merchant Banks (umb), over the Tier 2 Pension funds. In a mind-blowing article titled, �Fortiz can answer questions over where millions of Second Tier Pensions may be held�, IMANI throws a challenge to one Mawuli Hedo, a director of Fortiz who it claims is also a director at First Banc, the Tier 2 administrators of the Temporary Pension Fund Account (TPFA) with the Bank of Ghana, serving as the custodial bank, to come out clean on the raging debate. NPRA & TPFA The article says in January 2010, the TPFA was set up to provisionally administer the Tier 2 contributions, pending the licensing of Trustees and the registration of the Pension Schemes and employers since January 2010 remitted 5% (Tier 2 contributions) of their employees� salaries to the TPFA. IMANI says NPRA, which has the mandate to license Corporate Trustees, Fund Managers and Pension Fund Custodians, after almost a three-year wait without much information to workers and service providers, registered Pension Schemes at the end of October 2012 and full implementation under the Pension Reforms Act started in November 2012. Poor Investment �Even though the NPRA indicated that it was going to invest the Temporary Pension Fund Account, which was being administered by First Banc, 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.� At that time the Treasury Bill rate was around 15%, raising questions about who pocketed the balance of over 12% interest. �This was disappointing,� IMANI says, adding that �given that the average Treasury Bill returns between January 2010 and October 2012 was around 15% per annum. �Besides the provisional statement issued back then covered a period of 18 months instead of the 34 months period (January 2010 to October 2012) over which contributions had been made into the TPFA. This raises fundamental questions as to what was done with the proceeds from the TPFA administered by a director of FORTIZ.� 54 Years And Above IMANI says one of the serious implications of the situation is that �people who were 54 years and younger when implementation started in January 2010 will not get the full value of their lump-sum benefits upon retirement at 60. �Thus, all Ghanaian workers�both private sector or public sector workers�who were 54 years old or younger as at January 2010 will not get their full lump-sum benefits from Tier 2 Pension Schemes as NPRA is still holding on to 58 months of workers contributions and accrued benefits. There is no word from the National Pensions Regulatory Authority as to when these funds will be paid to the contributors or even how it will be paid.� IMANI recommends the auditing of all TPFA activities by an external auditor and accrued contributions in the TPFA should be transferred into the registered Tier 2 Pension Schemes selected by the various employers, asking the BoG to �submit a report on its stewardship of the TPFA.� SSNIT Chickens Out Just as the debate was reaching boiling point, Ernest Thompson, Director General of the Social Security and National Insurance Trust (SSNIT) made a desperate appeal to striking public sector workers to return to the negotiating table and come up with a road map that would solve the current impasse with government. According to Joy FM, Mr Thompson believes strikes are not the panacea to the ongoing controversy, hinting the situation may get worse if a lasting solution is not found as soon as possible, preferring to blame the impasse on the law. He claims the law was passed in a rush in December 2008, at a time when the appropriate structures were not put in place to execute the policy, saying �custodians were not registered; trustees were not registered at the time.� He says at the time the law was passed, the capacity of the National Pensions Regulatory Authority was even in question and wonders why the necessary due diligence were not corrected before the passage. �What has come now is just a tip of the iceberg,� he warns, adding that �we need patience to resolve the problem�. Sources say if care is taken, SSNIT may also be implicated in dodgy investments, hence Ernest Thompson�s call for truce. AG Sues The government, through the Attorney General, on Friday filed a suit at an Accra High Court to compel the striking workers to resume work. Dr Dominic Ayine, Deputy Attorney General, confirmed the legal action when he said �as government, we cannot dump the consequences of taking them on. We are keenly aware of the consequences and we will be taking measures to address those consequences as events unfold.� He also added that �there is nothing wrong with having a collision with labour. When labour believes the government is wrong they don�t back down so I do not see anything wrong with having a collision with labour; but we have to be fair to ourselves that organised labour can also go wrong from time to time.� Kpessah Whyte�s Insults An NDC member and presidential staffer, Dr Kpessah Whyte, almost found trouble for himself when he said on Joy FM�s newsfile programme at the weekend that leaders of labour unions lack the expertise to negotiate forcefully on pension related issues. Immediately he made the statement, President of NAGRAT, Christian Addae-Poku, called into the programme and condemned Mr Whyte for his insensitivity. He had to eat a humble pie when he finally apologised, saying, �I don�t think the comment was intended to malign or was intended to cast doubt on anybody. It was made in the context of a specific policy issue�If they feel insulted then I apologise.�