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The fate of salaried workers who were below 55 years in 2010 hangs in the balance, following the inability of the Social Security and National Insurance Trust (SSNIT) and the National Pensions Regulatory Authority (NPRA) to reach a consensus on the formula to use in paying them their pass credit. The pass credit is a worker�s total contributions to SSNIT and the accrued benefits prior to the coming into force of the National Pensions Act, 2008, (Act 766). The time it will be paid is crucial because it will determine the lump sum a worker will take home upon retirement. Although SSNIT is currently paying pass credit to the trustees of people within this category, the GRAPHIC BUSINESS learnt that the NPRA is contesting the formula used in making the payment. The authority, which regulates the pensions industry, has subsequently engaged a team of consultants to help find an amicable solution to the matter. The Chief Executive Officer of the NPRA, Mr Laud Senanu, confirmed in an interview that the team, made up of a Canadian actuary and some Ghanaian counterparts, had presented its report to the authority for review. The review of the proposed methods and formula is expected next week and will be done with officials from SSNIT, Mr Senanu said. �It is normally the lump sum that people look out for, since it is the biggest one-off benefit and because the whole thing is complicated, we are taking our time so that we do not use a formula that will affect the amount people go home with,� the NPRA boss said. SSNIT, however, declined to comment on the matter. The disagreement of the two institutions on the matter stems from the fact that a formula that requires SSNIT to release huge funds immediately to defray the pass credit could force the Trust to de-invest some of its investments, and that could threaten its survival in the medium to long term. On the other hand, an inappropriate formula will reduce the amount workers will earn after active service and that will defeat the spirit behind the pension reforms. The reforms were to give workers a sound retirement package. The inappropriate formula could also turn retirees and workers alike against the NPRA for succumbing to decisions that could impoverish them. Actuary disagrees Mr Daniel Aidoo Mensah, an actuary, a consultant for the Pension Reforms Implementation Committee, explained in a separate interview that the disagreement could have been avoided if the two bodies followed the requirements of a report issued by the committee on the matter. �The report took into consideration all these issues and that is why it determined the formula but asked that the payment be done equitably. With that, SSNIT does not require to make any huge payment immediately provided the people are not retiring; it gave room for SSNIT to stagger the payment,� he added. To help address the situation, the CEO of the NPRA said the authority had initiated a review of section 94 of the National Pensions Act, 2008, (Act 766), which compelled workers who were 54 years and above to stay under the old law while those below moved onto the new three-tier scheme. The NPRA CEO said a draft bill on the review had returned from Cabinet and was now being prepared for Parliament in the coming days. Grace period Under the new Pension Act, people who were 55 years and above were made to stay with the old scheme, which meant that SSNIT would pay their lump sum as well as monthly pensions after they had gone on retirement. However, those who were 55 years and below were migrated onto the new scheme, where their monthly five per cent contribution is currently lodged in a Temporary Pensions Fund Account (TPFA) at the Bank of Ghana (BoG). Another 13.5 per cent of their salary is deducted and paid to their respective corporate trustees to manage it. As a result, the contributions that were given to SSNIT prior to the coming into force of the law and the returns accrued from investments were to be transfered from the Trust to corporate trustees. Thus, people under this category who go on retirement will be entitled to three sources of income �contribution to trustees from 2012 till retirement, the five per cent and its returns on investments at the TPFA and the pass credit, which is now the bone of contention between SSNIT and the NPRA. For people yet to go on retirement, the pass credit is to be paid by SSNIT to the person�s corporate trustee to manage it, leading to the payment of a lump sum upon their retirement. However, for those ready to go on retirement, SSNIT will have to determine the amount they will receive as pass credit and pay it to them when them when they retire. The decision to let employees who were 55 years and above to stay on the old scheme while those below migrated as stipulated by the new law, was to ensure that NPRA and the corporate trustees had enough time to invest the latter�s contributions to ensure proper returns upon their retirement. However, the CEO of the NPRA said recent developments had showed that the five-year grace period was not sufficient hence the decision to review it to 10 years. �We want to review that portion of the law so that it will no longer be 54 years and below, rather reduce it to 50 years and below. When that happens, SSNIT will have ample time to pay out the pass credit,� Mr Senanu said.