The Acting Chief Executive Officer of National Pension Regulation Authority (NPRA), Laud A.K. Senanu has expressed worry about the delay of employers in registering employees onto the mandatory second tier pension scheme.
He described the delay as “undue” and warned that the Authority could sanction employers who fail to comply with the directive.
Mr Senanu was addressing representatives of workers in the formal sector on the Three- Tier Pension Scheme at a day’s outreach by the Authority in Ho.
The National Pension Act, 2008, Act 766 requires that employers register their employees in the Second-Tier Mandatory Occupational Pension Scheme.
According to him, only about 7,000 employers out of the more than 35,000 registered with the Social Security and National Insurance Trust (SSNIT) registered their employees under the second tier scheme as required by law.
He said NPRA will soon start transferring contributions of employees of those employers to their trustees and custodian banks from the Bank of Ghana and those fail to register their employees would be sanctioned.
Mr Senanu advised employees to ensure that their employers register them under the second tier pension scheme and strive to be conversant with operations of the trustees.
He explained that the Authority is delaying the approval of a few schemes because of issues of overlapping membership involving government employees and said such cases are being forwarded to the Attorney General for advice.
The second tier mandatory pension scheme is fully funded and privately managed, work-based scheme, designed primarily to give contributors a lump sum benefit to replace what was previously available under SSNIT scheme or Cap 30 scheme.
The lump sum benefits are dependent on the level of contributions, investment returns and administrative expenses incurred in the management of the scheme.
Its current contribution rate is five per cent of one’s salary and it is operated under trust by trustees approved and licensed by the NPRA.
Mr Emmanuel Dagbanu, Educational and Training Manager of the Authority who took participants through the three tier pension scheme said the first tier is mandatory for all employees in both public and private sectors of the national economy but optional for self-employed and administered by SSNIT with a contribution rate of 13.5 per cent of the worker’s salary.
He added that the third tier is voluntary and fully funded and managed privately.
Mr Dagbanu said the scheme has tax incentive support up to 16.5 per cent of contributor’s salary to provide additional funds for workers who want to make voluntary contributions to enhance their pension benefits.
He said the scheme applied to individuals in the informal sector who were not covered by any pension scheme under the mandatory part of the three-tier pension scheme.