Employers Kick Against Three -Tier Pension Scheme

Members of the Ghana Employers Association (GEA) are protesting against the proposed three-tier pension scheme which is due for passage by Parliament by next week.

At a hurriedly arranged meeting of its members in Accra yesterday, the association objected to the inclusion of the proposed third-tier scheme in the bill because they said the wording of the bill suggested that the third tier was voluntary, while at the same time it included elements of compulsion.

Briefing its members, the Executive Director of the GEA, Mrs Rose Karikari Anang, said it was unacceptable for the third tier to be proposed as a voluntary scheme and be regulated by legislation.

She said the wording of the bill, as expressed in its spirit, indicated an element of compulsion, in spite of the word 'voluntary', adding that “it portrays the fact that every organisation must have a three-tier pension scheme”.

She said the association did not have any objection to the first and second-tier schemes, since they were basic to guarantee the income security of workers when they retired.

Among the other reasons Mrs Anang offered for the GEA's opposition to the bill was that such schemes were established by various organisations based on their financial strengths and ability to sustain those schemes to supplement the national pension benefit of their workers.

She suggested that Section 1(c) should be expunged from the bill, since it had already been incorporated in the management of a voluntary pension.

The GEA's apprehension of the bill stemmed from the fear of the likelihood that workers would take advantage of what she referred to as the inconsistencies in the bill to demand the establishment of all the three different schemes.

Mrs Anang stated that “apart from the two mandatory contributions, the legislation of any scheme which will make it mandatory or to be negotiated upon for employers to establish other schemes will compound the problem of cost of doing business and low investments in the country”.

The members of the association were of the belief that Section 106 of the proposed bill should be expunged, since it gave semblance of a mandatory scheme into which an employer would contribute funds.

The President of the association, Mr Charles Cofie, who is also the Managing Director of Unilever Ghana Limited, stated that other alternatives existed to ensure that workers benefited through higher productivity.

He said members needed to study the proposed National Pension Reforms Bill to be able to acquaint themselves with the provision of the law and make contributions before its expected passage some time next week.

A labour consultant, Mr Austin Gamey, said the bill was manageable but added that there was the need for clarity to ensure its proper understanding.

Mr Asare Akuffo, the Managing Director of the HFC Bank, drew members' attention to some of the incentives that the bill would bring to companies that undertook to institute the voluntary pension schemes.

Currently, privately managed pension schemes and provident funds do not enjoy any tax relief or incentives.

The government is currently undertaking national pension reforms by introducing a contributory three-tier pension scheme and the establishment of a national pensions regulatory authority to oversee the administration and management of registered pension schemes and trustees of registered schemes.

Story by Boahene Asamoah