The new threetier pension schemebenefits and safeguards. What are the contribution rates and how are they distributed between the employer and employee. Axis pension trust ltd was incorporated the same year. Pension patterns and challenges in subsaharan africa world. The new pension scheme which was established in 2004 under the nigeria pension reform act no. Establishment of contributory threetier pension scheme. Auditors report on prescribed capital requirements 4. The scheme has been introduced by the government of india and monitored by the. Employers should create provident funds for their employees in order to fully optimise the benefits of the new threetier pension scheme, chief executive of capel pensions advisor lillian ricketts. The new threetier pension scheme management of the. Petra trust company limited is a leading corporate trustee authorized by the national pensions regulatory authority npra to manage pension schemes and provide support services to individuals and organizations in ghana. Pdf pension systems in ghana william affram academia. We manage the pensions of thousands of employees from leading multinational organizations, government agencies as well as top. Pension patterns and challenges in subsaharan africa.
The social security and national insurance trust ssnit is a statutory public trust charged under the national pensions act 2008 act 766 with the administration of ghanas basic national social security pension scheme and to cater for the first tier of the contributory threetier scheme. The pension scheme for public service employees and armed forces 11 c voluntary occupational schemes 14. What happens if a worker has contributed less than fifteen years to the scheme before retirement. Act 766 national pensions act, 2008 social security and. The social security and national insurance trust is to revive its pension scheme for informal sector workers after four years of inaction. There is a monthly payment, which is equal to fifty percent of last drawn salary. Act 766 national pensions act, 2008 schedule act of the parliament of the republic of ghana entitled national pensions act, 2008 an act to provide for pension reform in the country by the introduction of a contributory threetier pension scheme. Minimum payment to retired employees as pension through this old scheme is rupees 3,500. It was observed that over the years, concerns have been raised and agitations made by public servants over. Thereafter, the problems and characteristic features associated with the old pension scheme is examined.
The study found that the threetier pension scheme ensures information access, bulk payments, internet communication, arbitrary withdrawal, knowledge on pension. The first part of the paper considers a brief history of the pension system in nigeria. The occupational pension scheme, provident fund scheme, personal pension scheme and other privately managed pension schemes are managed by trustees approved by the board. What every ghanaian employee should know about the new 3tier. National pensions act 2008, act 766, published on the national pensions regularoty authority of ghana. The guidelines provide, amongst other things, an exemption for the expatriate from contributions to the pension scheme in ghana if he or she resides and is employed in ghana for a period not exceeding 36 months and has shown proof of membership of a pension scheme of. Ssnit the new pension scheme what is this new pension scheme. The act establishes a contributory threetier pension scheme, and a national pensions regulatory authority to oversee the administration and management of registered pension schemes and trustees of. This paper is the first scholarly work that examined the new pension schemes in ghana, and this makes it a useful reference material for future studies i n same or similar scholarly endeav ours.
Under the new act, workers in ghana can now contribute up to 35% of their gross salary to pensions and not. Ghana pension system overview country profile pdf other resources. Tier 2 is a mandatory defined contribution scheme 1 to which. Management of the scheme and other matters, daniel aidoo mensah, project consultant, pension reform implementation committee of ghana, 2011. The social security and national insurance trust ssnit is a statutory public trust charged under the national pensions act 2008 act 766 with the administration of ghana s basic national social security pension scheme and to cater for the first tier of the contributory threetier scheme. Government of ghana does not have the means to take on pension. An assessment of pension coverage among the informal. National pensions act, 2008 act766 national pensions act. Occupational and personal pension schemes general regulations, 2011 arrangement of regulations regulation application for approval as trustee 1. Feb 16, 2015 introducing ghanas 3tier pension scheme. A handful of players has also emerged to take on ghanas underserved informal economy, writes jerome amedo, asoko insights lead researcher in ghana. The basic national social scheme operates under the social security and national insurance trust. It will also advise government on the overall policy on pension matters in ghana.
Nigerians anticipate a seamless and effective implementation of the scheme, with high hopes that it will bring the informal sector into the pension scheme to cater for their needs. The guidelines sought to provide direction on expatriates registration for the pension scheme in ghana. Ghanas pension scheme, as in many african nations has colonial origins and dates back as early as the 1950s, with the pensions ordinance number 42 cap 30. The act 766 which was passed on december 12th, 2008 mandated the establishment of a new contributory threetier. Get unlimited access to the best stories on medium and. Most private sector establishments did not accord any priority to. The new act also made allowance for the participation of the informal economy and extended the cps coverage to employees of state and local governments. Box mb 40 accra ghana the melr mtef pbb for 2019 is also available on the internet at.
Download npra newsletter national pensions regulatory authority. Noncontributory elderly assistance schemes exist in nine countries and include universal, pensiontested and meanstested eligibility schemes. Ssnit to revive informal sector pension scheme graphic. It discusses the state of the current three tier pension scheme and how it measures up against other pension schemes such as the ssnit pension scheme which predated it. Petra insight what every ghanaian employee should know. The mobile money enabled pension scheme was launched at a short ceremony in accra ghana. It is a two tier contribution based investment structure in which an individual has full authority to decide where to invest his money. New pension act and the changes made pension schemes in ghana have evolved over the years since the colonial era due in part to a continuous drive increase the coverage of such schemes and also to improve the entitlement of retiree covered under these schemes. The vision to start a thriving pensions management services company was conceived by its cofounder, afriyie oware, in the year 2010. What is the contribution of a worker to the social security scheme. This paper investigates the role and effectiveness of ghanas new three pension scheme in providing and ensuring income security for ghanaians in their old age.
The national pensions act caters for the establishment of a new contributory threetier pension scheme with a national pension regulatory authority to oversee the efficient administration of the composite pension scheme. Section 30 does not apply to officers and men of the ghana armed forces and any. By the statesman coronavirus disease covid19 get the latest live updates about the coronavirus pandemic. The pension bill caters for the establishment of a new contributory threetier pension scheme with a national pension regulatory authority to regulate and oversee the efficient administration of the composite pension scheme. In ghana, the 1992 constitution article 376 explicitly asks the government to ensure that contributory schemes are instituted and. Introducing ghanas 3tier pension scheme paysail medium. The paper was designed as an overviewbackground document to provide context and assist. Eligibility requirements for company incorporated in ghana 3. Laws governing the national pension scheme in ghana the national pensions act 2008 is the prevailing law governing the pension scheme in ghana.
The new national pension scheme was instituted by the national pensions act, act 766 which ensures that every ghanaian worker receives retirement benefits as and when due. The pensions act of 2008 has introduced two new pension e rs, to operate in conjunco n with the ssnit pension scheme. Tax services nd edition recent amendments to the national. In previous articles on the pension reform in ghana, the. The scheme seems very novel both in organization and administration to many employees and employers in nigeria. The government of ghana enacted another pension reform in 2008 to establish a. Republic of ghana medium term expenditure framework mtef for 20192022 ministry of employment and labour relations programme based budget estimates for 2019 republic of ghana. Ghana government to soon announce key partner for bauxite mining. Enerdynamic announces joint venture with a ghanaian firm to build 15,000 enertec homes in ghana. Longer contributions lead to increase in the pension. The cofounders, afriyie oware and simon komla agbenyegah ayivi, believing in that vision, resigned their prestigious jobs at the time to embark on this entrepreneurial venture. Axis pension trust, an indigenous pensions management company, has received a continental award in recognition of its high standards of pension risk management. Social security and pension in ghana, pension and work and.
Quick facts about the ghana threetier pension scheme. The new scheme will comprise two mandatory schemes and a voluntary scheme as follows. The parliament of the republic of ghana enacted the national pensions act 2008 act 766, to provide for pension reforms in ghana. Over the years, concerns have been raised and agitations made by public servants over inadequacies of the level of pensions to sustain a respectable life for retired public servants. Private investment into ghanas pension funds has seen strong growth in recent years, prompting continued interest in a nascent industry. This paper questions the ability of the new pension scheme the threetier pension. It also identifies some areas that need to be addressed in order to make the. The role of ghanas new three tier pension scheme and its. The award was presented to the company at the second africa pensions awards held in abuja, nigeria. In previous articles on the pension reform in ghana, the writer gave a background to the pension reforms leading to the enactment of the national pensions act, 2008. This law was passed to provide for pension reform to replace the then cap 30 and ssnit law social security and national insurance trust law which used to be the law governing the pension scheme. New guidelines in march 2017 and exemptions for expatriates the npra in march 2017 issued new guidelines which became effective from 7 april 2017. The new threetier pension scheme management of the scheme.
Axis pensions trust limited axis pensions trust limited. Those appointed prior to january 2004 get their post retirement amounts through a pension plan, which defines the benefit type. The act establishes a contributory threetier pension scheme, and a national pensions regulatory authority to oversee the administration and management of registered pension schemes and trustees of registered schemes. An overview of the national pensions act, 2008 iops. Oct 26, 2015 it will also advise government on the overall policy on pension matters in ghana. This paper investigates the role and effectiveness of ghana s new three pension scheme in providing and ensuring income security for ghanaians in their old age. Government of ghana initiated a major reform of the pension system in ghana. Iops research and working papers ghana pension system overview. A new partnership has been signed by peoples pension trust, vodafone ghana, operators of vodafone cash and dusk capital, a fund management company to provide easier and quick pension solutions to all workers in ghana particularly those in the informal sector. Government employees pension scheme retirement benefits.
New pension system is a voluntary contribution of funds for a sustained period of time till the age of 60years to enable him to draw pension after he attains 60 years of age. Axis is a private company, wholly owned ghanaian and independent of other players in the pensions industry in ghana. As already told it is a two tier structure consisting of. These two new ers provide significant benefit for the ghanaian. The study therefore aims at identifying the emerging new trends in social security in the informal economy in the madina municipality. Nigerias new micropension scheme it is an interesting time in the nigerian pension industry with the recent launch of the micropension plan by the presidency. Motivation for new legislation and regulatory framework 17 ii fundamental tenets of new legislation 17 iii role and effectiveness of the. In a previous article on the pension reform in ghana, the writer looked at the benefits and safeguards of the new threetier pension scheme which will be regulated by a national pensions authority which will oversee the efficient administration of the composite. Customers of collapsed microfinance institutions to be refunded from 24th feb. Fund, the other two are virtually unfunded schemes with implications for sustainability.
The main recommendation of the commission was the creation of a new contributory threetier pension system for ghana, funded by direct contributions of employers and employees to, replace existing parallel pension schemes. In ghana, the 1992 constitution article 376 explicitly asks the government to. New pension scheme is an effort of the government to reduce its pension liability and also helping general public to decide where to invest their money. Gms flash alert 2018016 ghana authorities provide clarity. The study further revealed that the benefits to be derived from an awareness of pension schemes in ghana, significantly affected the assessment of the threetier pension schemes in ghana. Recent amendments to the national pensions act february 2015 in brief the national pensions amendment act, 2014 act 883 was passed by the parliament of the republic of ghana and gazetted on 31 december 2014. Additionally, the introduction of pension scheme in ghana is quite new and there is limited literature regarding its effectiveness in dealing with the problems of the schemes predating it. Contributory pensions scheme vs pension reform act 2014. The simplest goal of a pension scheme is to provide adequate income for retirees so. Axis pension trust ltd aptl, a leading company in the retirement savings industry in ghana, was incorporated in september 2010 and obtained a license as a corporate trustee from the national pensions regulatory authority in march 2012.
The retirement age under the new pension scheme in ghana. The new contributory threetier pension scheme comprises two mandatory schemes and a voluntary scheme as follows. The workers who are at 55 years or above at the time of commencement of pension scheme are exempt from joining the new pension schemes. Occupational and personal pension schemes general regulations, 2011, published on the national pensions regulatory authority of ghana. Before the adoption of the new pension scheme in 2004, nigerias social security provision for the retired and aged was awkward. In recognition of the need for reforms to ensure a universal pension scheme for all employees in the country, and to further address concerns of ghanaian workers. The new pension law, the national pensions act, 2008act 766 was enacted on december 12th, 2008.