FirstBanc holds workshop on new Pension Scheme
FirstBanc Financial Services (FFS), an investment banking firm, at the weekend organized a day’s workshop on the new Pension Act to help institutions roll out the Three-Tier Pension scheme before the deadline for registration.
The National Pension Regulatory Authority (NPRA) had set June 29, 2012 as the deadline for companies to register, after which any institution that failed to meet the closing date, would have no choice but be provided a custodian, trustee and fund manager under compulsion by the Authority.
Speaking to journalists at the end of the workshop in Accra, Mr Frank Gamadey, Head of Pensions at FFS, observed that factors including insufficient education on the Three-Tier Pension scheme and its implementation accounted for the low registration turn out.
He added that most companies, particularly the bigger companies that have large provident funds of their employees, were reluctant to enroll under the new pension scheme because they wanted to hold on to the monopoly they had over their funds.
Mr Gamadey noted the typical unpleasant “Ghanaian late and waiting attitude” was another factor that militated against massive and successful enrollment under the scheme.
He disclosed FFS would organize series of workshops for institutions and organizations on the new Pension scheme before the deadline.
The workshop provided the participants with information on the features of the pension’s reform in Ghana, the role of employers and employees and tax benefits and implications under the new scheme.
Earlier, Mr Sam Pee Yalley, Acting Chief Executive Officer of the NPRA, underscored the importance of the new scheme and added that the pension industry in the country needed to be well developed.
He encouraged the participants to embrace the scheme to secure an income security during retirement and liquidity now during economic hard-pressed times.
The new Pensions Act (Act 766) of 2008 caters for the establishment of a contributory three- tier pension scheme with a Pensions Regulatory Authority to oversee the administration and management of the composite scheme.
The new contributory three-tier pension scheme comprises two mandatory schemes and a voluntary scheme that includes a first tier basic national social security scheme, which will incorporate an improved system of Social Security and National Insurance Trust (SSNIT) benefits, that is mandatory for all employees in both the private and public sectors and optional for the self-employed.
The scheme also has a second tier occupational (or work-based) pension scheme, mandatory for all employees but privately managed, and designed primarily to give contributors higher lump sum benefits than presently available under the SSNIT pension scheme.
The third tier is a voluntary provident fund and personal pension schemes and it is supported by tax benefit incentives to provide additional funds for workers who want to make voluntary contributions to enhance their pension benefits and also for workers in the informal sector who are not catered for by the first two mandatory schemes.
The first tier basic national social security scheme would be managed by SSNIT where as the mandatory second tier and the voluntary third tier schemes will be privately-managed by Trustees licensed by the NPRA with the assistance of pension fund managers and custodians registered by the Authority.
The pension fund managers and custodians will first be licensed by the Securities and Exchange Commission and thereafter they would be required to register with the NPRA.
Source: GNA