Despite efforts to encourage the working population to contribute towards their retirement, only one percent of informal sector workers are enrolled on any form of pension schemes.
It is estimated that about 85 percent of the country’s workforce are found in the informal sector, out which only one percent contributes to one form of pension scheme or the other, which the National Pensions Regulatory Authority (NPRA), regulator of pensions sector including SSNIT, described as very paltry and discouraging.
This means that most of these workers would have to rely on the benevolence of family and friends to survive when they are no longer in active service.
“This paints a very gloomy picture for the Ghanaian working force,” NPRA’s CEO, Hayford Atta Krufi said.
“Poverty and other old age, as well as retirement challenges ahead of the Ghanaian worker within the coming years, maybe uncontrollable if this is not addressed,” he warned.
The CEO spoke at a sensitization workshop for financial journalists in Accra and said the level of participation in the three-tier pension scheme was unacceptable. He said urgent and drastic action were therefore needed in order to bring informal sector worker on board pension schemes.
Nowadays, he said pension issues have become more of a social and economic challenge than before and that a lot must be done to sensitize the working population not only to encourage them, but also to provide the assistance and support for them to enrol on pension schemes so they can enjoy a comfortable and stress-free retirement.
In this regard, he said his office has mapped up a strategy to help address this looming national challenge before it gets out of hand.
As an Authority, he said, “We are committed to a nationwide outreach programme to educate and sensitize workers to deepen their understanding of the Three-Tier Pension Scheme, which seeks to provide for pension benefits that will ensure better retirement income security, for all workers especially those in the informal sector, and a better standard of living.
“We are working towards the provision of better old-aged-life for all Ghanaians by ensuring retirement income security. As you might be aware, the Authority has been given prosecutorial powers to prosecute defaulting employers. I mean employers who fail to pay pension contributions of their employees. In light of this, we have successfully trained some of our staff and our legal department has started processing persistent offenders for prosecution.”
He also disclosed that the Authority is currently preparing to prosecute 13 defaulting employers. He said the NPRA was determined to use all legal means to ensure compliance with the pension law and to protect the interest of workers and secure their future.
The NPRA under the National Pensions Act, 2008 (Act 766) has been implementing the contributory Three-Tier Pension Scheme since January, 2010.
Given that the NPRA will be 10 years next year, the first batch of workers will be retiring at the age of 60, under the reforms and are expected to benefit from the scheme and Mr. Akrufi assured that plans are being put in place to ensure smooth payment of the due benefits.
“We at the NPRA are very much aware of their expectation of receiving their benefits intact. I can assure such Ghanaian workers that they will receive their benefits without any difficulties,” he reiterated.