Ghana Insurers Association appeals to be enrolled to manage new Pension Scheme

The Ghana Insurers Association (GIA) has appealed to the government to consider enrolling the association to manage and administer the New Pension Scheme.

Mr Benjamin K. Acolatse, the President of GIA, said life insurance companies had been excluded especially from the second and third tiers even though they (the life insurers) had the expertise and capabilities to provide requisite products to guarantee significant benefits to the working population.

He was speaking at the launch of 2011 Insurance Awareness Month celebration organised by GIA in Accra on Tuesday.

Under the New Pension Act 2008, Act 766, workers are expected to contribute 5.5 per cent of their basic salary and employers would add 13 per cent of workers’ basic salary to make it 18.5 per cent.

The first tier basic National Social Security Scheme makes it mandatory for all employees in both the private and public sectors; whiles the second tier occupational (or work-based) pension scheme, is mandatory for all employees but privately managed.

The third tier is a voluntary provident fund and personal pension scheme which is supported by tax benefit incentives to provide additional funds for workers who want to make voluntary contributions to enhance their pension benefits as well as workers in the informal sector.

Mr Acolatse said he was worried that life insurers had been marginalised to provide services under the second and third tiers of the New Pension Act, describing the pension regime as unfavourable even though the players in the industry were leading providers of private pension and provident fund products.

He quoted portions of the New Pension Act saying it unfavourably excluded players in the life insurance industry.

“The Act says that ‘The second tier and the voluntary third tier shall be privately-managed by approved Trustees licensed by the Pensions Regulatory Authority with the assistance of pension fund managers and custodians registered by the Authority.”

Mr Acolatse said his outfit had sent a written petition to the Pension Regulatory Commission and had petitioned the Minster of Finance and Economic Planning on the matter.

He said soaring motor claims due to high repair costs and exorbitant awards by law courts in respect of injury and deceased claims impacted negatively on finances of players in the insurance industry.

Mr Acolatse said he was worried that the country’s legal framework placed no limit on bodily injuries and death claims.

He proposed the adoption of a code that placed limits on bodily injuries and death claims.

Mr Seth Tekper, Deputy Minister of Finance and Economic Planning, gave the assurance that he would send the petition and concerns raised to the Sector Minister for consideration.

Source: GNA