Workers register with 3-tier pension scheme

ABOUT 304,500 workers in both the formal and informal sectors have registered with the third-tier voluntary personal pension (provident fund) under the new pension scheme.
The figure comprises about 4, 500 employees working with companies in the formal sector and about 300,000 traders under one large informal sector group with a nation-wide membership.
In line with provisions under section 112 (2) of the National Pension Act, 2008, (Act 766), the National Pensions Regulatory Authority (NPRA), has formally communicated to the Internal Revenue Service (IRS) to grant tax relief to those contributors.
Speaking to the Daily Graphic in Accra yesterday, the acting Chief Executive of the National Pensions Regulatory Authority (NPRA), Mr Daniel Aidoo Mensah, said the amount of tax relief a contributor received under the arrangement could go as high as 16.5 per cent depending on the amount of money one contributed.
He explained that the tax relief would be paid to the individual contributors upfront and on monthly basis while companies and groups would receive it after they have filed for it at the end of each year.
Mr Mensah added that provision had been made in the third-tier scheme to cater for the peculiar needs of workers in the informal sector of the economy who constituted the majority of workers in the country.
Under the arrangement, employees of the informal sector will decide to contribute any amount they can afford on monthly or any other regular basis. The benefits that accrue will depend on how much contribution was made. The more the amount contributed, the bigger the benefit.
Touching on how employees were receiving the scheme, Mr Mensah said many more companies and groups applied to register under the scheme and the authority was working on those applications.
He said many of the companies that had currently registered under the scheme had existing provident funds which they migrated onto the new scheme.
In a related development, the Chief Executive of the NPRA said the authority had begun discussions with the National Planning Development Commission (NDPC) and other stakeholders to initiate a national discussion on how the pension fund should be invested.
He also indicated that the authority had received inputs from two stakeholders fora it held and pointed out that the authority was in the process of completing the final draft by the end of the month which would be forwarded to the Attorney General’s Department for onward transmission to parliament for deliberation and approval.