National pensions act, 2008 act766 national pensions act. 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. Gms flash alert 2018016 ghana authorities provide clarity. An assessment of pension coverage among the informal sector. Npra proforma invoice for payment of asset based fees. Early pension ranges from 60% age 55 to 90% age 59 of the full pension. 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. A statement signed by mr richard kwame asante, board chairman of npra, copied to the ghana news agency, gna in accra on friday, said five guidelines and six application forms had been issued. The convenient sampling procedure was used to select fifty 50 managers and nonmanagers in the ratio of 1. 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. 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 second tier is a defined contributory occupational pension scheme mandatory for. 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.
National pension system nps nps, regulated by pfrda, is an important milestone in the development of a sustainable and efficient voluntary defined contribution pension system in india. Quick facts about the ghana threetier pension scheme. Jun 16, 2017 the act 766 which was passed on december 12th, 2008 mandated the establishment of a new contributory threetier pension scheme with the national pensions regulatory authority npra to oversee the efficient administration of the composite pension scheme. Establishment of contributory threetier pension scheme. 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. 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. The occupational pension scheme, provident fund scheme, personal pension scheme and other privately managed pension schemes are managed by trustees approved by the board. Government employees pension scheme retirement benefits.
The new contributory threetier pension scheme comprises two mandatory schemes and a voluntary scheme. The new pension scheme owes its origin to the need to bequeath nigerians an entirely tration in nigeria. A handful of players has also emerged to take on ghanas underserved informal economy, writes jerome amedo, asoko insights lead researcher in ghana. Nov 05, 2009 20091105 opinions of thursday, 5 november 2009. The employer will now pay % instead of the current 12. There is a monthly payment, which is equal to fifty percent of last drawn salary. The basic national social scheme operates under the social security and national insurance trust. 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. Ssnit to revive informal sector pension scheme ghana news. Pensions in africa this paper discusses why the development of pension systems is important for the african region. Following the background to the study is the analytical framework in part 2.
Coverage of birth registration and national identification systems 25. It also looks at the current pension arrangements in selected african countries. Ghana national pensions act 766 social protection and human. 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 ghana national pensions regulatory authority npra, on friday issued a public notice on the implementation of the threetier pension scheme. Pension funds for ghanas informal sector private investment into ghanas pension funds has seen strong growth in recent years, prompting continued interest in a nascent industry. 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.
The reform switched her payasyougo run public pension scheme to a contributory regime. Introducing ghanas 3tier pension scheme paysail medium. Section 30 does not apply to officers and men of the ghana armed forces and any. Occupational and personal pension schemes general regulations, 2011, published on the national pensions regulatory authority of ghana. This is a noncontributory pension scheme known as cap 30 for workers categorized as senior civil servants. The first tier is the basic national social security scheme, which incorporates an improved system of social security and national insurance trust ssnit benefits that is mandatory for all employees in both the private and public. Ghana begins implementation of threetier pension scheme. Oct 02, 2012 in january 2010, a new system of pension provision for ghanaian workers came into effect following the passing of the national pensions act in december 2008 and its official launching in september 2009. The role of ghanas new three tier pension scheme and its. This paper questions the ability of the new pension scheme the threetier pension. Pfrda is the regulator for the new pension system nps and its regulatory responsibilities include regulating charges, entry and exit, quality and provision of services of npscan, cra, pfms, trustee. It is a defined benefit scheme and mandatory for workers to have. Part 3 presents the operational framework of the new pension scheme and pension model in nigeria. The government of ghana enacted another pension reform in 2008 to establish a.
Creation of encumbrance in respect of contribution 114. The retirement age under the new pension scheme in ghana. This amendment appears to underline permanent emigration as a key condition. 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.
Ghana for a period not exceeding 36 months and has shown proof of membership of a pension scheme of another country. These two new ers provide significant benefit for the ghanaian. The mobile money enabled pension scheme was launched at a short ceremony in accra ghana. This pension reform gave access and opportunity to the informal sector workforce of the ghanaian economy to contribute to pension scheme. Low pension benefits the overarching issue of agitations.
The new threetier pension scheme management of the. Pension patterns and challenges in subsaharan africa world. However, the establishment of a national social security system by act 279 of 1965 was the beginning of a formal. Oct 26, 2015 the new threetier pension scheme requires an additional contribution rate of 1% to be shared equally between the employer and employee. As compared to the taxsaving investment instrument, the returns offered by nps are much higher. Extending pension coverage to the informal sector in africa. Social security and pension in ghana, pension and work and. The united kingdoms retirement plan for the countys working class involved the setup of a number of provident funds, which were subsequently transferred into a basic social. The social security and national insurance trust is to revive its pension scheme for informal sector workers after four years of inaction. An assessment of pension coverage among the informal. Eshun, thomas bright 20091105 the retirement age under the new pension scheme in ghana.
Abstract this study examined the efficiency of the, new ssnit threetier pension scheme in ghanaian. The study found that the threetier pension scheme ensures information access, bulk payments, internet communication, arbitrary withdrawal, knowledge on pension. The scheme has been introduced by the government of india and monitored by the pension fund regulatory and development authority. The simplest goal of a pension scheme is to provide adequate income for retirees so. The new threetier pension scheme requires an additional contribution rate of 1% to be shared equally between the employer and employee. An overview of the national pensions act, 2008 iops. Pension protection fund a pension protection fund has been created under the new act to include an annual subvention of 1% of the total monthly wage bill payable to employees in the public sector, an annual pension protection levy the percentage of which is to be determined by pencom and income from investments of the pension protection fund. What every ghanaian employee should know about the new 3tier. Tax services nd edition recent amendments to the national. The paper was designed as an overviewbackground document to provide context and assist. Pension reform act 2014 the good, the bad and the ugly. In january 2010, a new system of pension provision for ghanaian workers came into effect following the passing of the national pensions act in december 2008 and its official launching in september 2009. Laws governing the national pension scheme in ghana the national pensions act 2008 is the prevailing law governing the pension scheme in ghana.
Brief history of pension acts in ghana the history of pension act in ghana dates back to the pension ordinance of 1946. On average, investments in stocks, bonds and propinsights what every ghanaian employee should know about the new 3tier pension structure april 2012. The act 766 which was passed on december 12th, 2008 mandated the establishment of a new contributory threetier pension scheme with the national pensions regulatory authority npra to oversee the efficient administration of the composite pension scheme. When the new pension law is passed, all workers currently on the ssnit scheme and below 55 years will automatically join the new scheme. Consequently, this is undoubtedly a new horizon that calls for detailed research.
With an ageing population mostly working in the informal sector, and young people increasingly moving away from home, the ability to afford retirement in ghana is becoming a growing problem. Where an exemption is granted the npra shall issue an exemption certificate for a tier 2 scheme managed by private fund managers to an expatriate. Part 4 presents an overview of the current pension scheme. The ghana national pensions act 766 establishes the legal framework for a national pension schemes and a national social security scheme. 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 government in july 2004 initiated a major reform of the pension system in ghana. This prompted the establishment of pension reforms that gave birth to the new pension law called the national pensions act 2008 act 766. The scheme has been introduced by the government of india and monitored by the. Pension fund accounting us a new area that needs input from scholars, hence, this study will help other researchers with interest in pension. Payment of benefits to ghanaian members the amendment act makes provision for nonghanaian members of the first tier scheme who are emigrating or have emigrated permanently from ghana to be entitled to lump sum benefits. 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. Petra insight what every ghanaian employee should know. The scheme was introduced in 2010 as a pension buffer for. Ssnit the new pension scheme 20202021 ghana tertiary. 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.
Pfrda pension fund regulatory and development authority pfrda was established by the government of india on 23rd august 2003. Pdf pension systems in ghana william affram academia. The first tier basic national pension scheme is being managed by a restructured ssnit. Axis pensions trust limited axis pensions trust limited. In previous articles on the pension reform in ghana, the. Authority npra heads of departments and agencies social partners distinguished invited guests. Oct 23, 2017 with an ageing population mostly working in the informal sector, and young people increasingly moving away from home, the ability to afford retirement in ghana is becoming a growing problem. Growth of assets under the 3 tier scheme from 20 2018. An overview of the national pensions act, 2008 oecd. Those appointed prior to january 2004 get their post retirement amounts through a pension plan, which defines the benefit type. Mar 18, 2012 the ghana national pensions regulatory authority npra, on friday issued a public notice on the implementation of the threetier pension scheme. Payment of monthly asset based fees to service providers.
Employers urged to create provident funds news ghana. However, workers aged 55 years and above will be exempted but have the option to join the new scheme. The chief executive officer, national pensions regulatory. 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. A comparative analysis of pension reforms and challenges in ghana. Can a new pension scheme offer security to informal workers. Longer contributions lead to increase in the pension. Management of the scheme and other matters, daniel aidoo mensah, project consultant, pension reform implementation committee of ghana, 2011. 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. 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. Keywords pension scheme, defined contribution plan. Minimum payment to retired employees as pension through this old scheme is rupees 3,500. 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.1041 981 524 969 1389 1460 1358 1129 689 98 1179 1405 1138 790 1391 96 997 897 687 1305 1526 556 963 71 250 217 1315 806 1432 773 629 564 1120 1471