Third-tier pension scheme to cover informal sector (Page 21)

Story: Lucy Adoma Yeboah
THE Pensions Implementation Committee has stated that the third-tier voluntary provident fund and personal pension scheme under the proposed three-tier pension scheme is meant to cater for the peculiar needs of workers in the informal sector.
It said the exclusion of the third-tier from the National Pension Reform Bill would defeat the aim of drawing a total of 80 to 85 per cent of informal sector workers into a national pension scheme.
These sentiments were expressed by the Chairman of the committee, Mr T. A. Bediako, when he spoke to the Daily Graphic in reaction to a protest against certain aspects of the National Pension Reform Bill by the Ghana Employers Association (GEA).
The bill caters for the establishment of a new contributory three-tier pension scheme with a National Pension Regulatory Authority to control and oversee the efficient administration of the composite pension scheme.
A story carried by the Daily Graphic on Friday, July 11, 2008 indicated that members of the GEA objected to the inclusion of the proposed third-tier scheme in the bill because they said although the wording of the bill suggested that the third-tier was voluntary, it at the same time included elements of compulsion.
Section 1 of the bill states, “There is established by the act a contributory three-tier pension scheme consisting (a) a mandatory basic national social security scheme; (b) a mandatory fully funded and privately managed occupational pension scheme, and (c) a voluntary fully funded and privately managed provident fund and personal pension scheme.”
Briefing its members, the Executive Director of the GEA, Mrs Rose Karikari Anang, said it was unacceptable for the third-tier to be proposed as a voluntary scheme and be regulated by legislation and, therefore, called for the deletion of Section 1 (c) from the bill.
She said the wording of the bill, as expressed in its spirit, indicated an element of compulsion, in spite of the word ‘voluntary’, adding that “it portrays the fact that every organisation must have a three-tier pension scheme”.
The GEA’s apprehension to the bill stemmed from the fear of the likelihood that workers would take advantage of what she referred to as the inconsistencies in the bill to demand the establishment of all the three different schemes
Mr Bediako drew attention to the fact that the GEA had already sent a petition to the committee and also Parliament, therefore, advised the association to allow the matter to be dealt with dispassionately, now that the bill was before Parliament.
He said the committee had, from the beginning of its work, involved the GEA and other stakeholders such as the Social Security and National Insurance Trust (SSNIT), unionised labour and experts on labour issues where they were allowed to make inputs, adding that Mr Alex Frimpong, an executive member of the GEA, was a member of the legal sub-committee.
He observed that looking at the behaviour of the GEA, it seemed the Pensions Implementation Committee had to embark on more educational programmes to enable the stakeholders to better understand the benefits of the proposed scheme.
For his part, the Project Co-ordinator of the committee, Mr Daniel Aidoo Mensah, said the third tier scheme which will include tax exemption, “will serve as a positive incentive for the scheme members to make additional voluntary contributions to enable accrue more benefits for their retirement”.
He reiterated that it was voluntary, adding that if an organisation decided to introduce it, the employer and his or her employees could deliberate on how best to arrive at a decision that would be acceptable to both parties, since its inclusion was not to create problems for employers.
Meanwhile the Pensions Implementation Committee on Wednesday, held a press briefing in Accra and stated that much as it would not want the third tier to be expunged from the scheme, it had no objection to any change of wording to suit all stakeholders.
The members also took the opportunity to appeal to Members of Parliament (MPs) to “do justice to the bill” since the issue of pension affected everybody.
There have also been separate statements from the leadership of the Ghana Trades Union Congress (TUC), the Ghana National Association of Teachers (GNAT) and the Civil Servants Association (CSA), welcoming the inclusion of the third tier scheme which they said could meet the social security needs of many working people, especially those in the informal sector.