Labour Ministry calls for expansion of pension to cover informal sector

The Director of Finance and Administration at the Ministry of Employment and Labour Relations, Mr Hamidu Adakurugu, has called for the expansion of pensions to ensure all workers, especially those in the informal sector who make up over 75% of the workforce, are enrolled in a pension scheme.

Speaking on behalf of the Sector Minister at the launch of National Pensions Awareness Week, he noted that currently, only 2.4 million workers, which represents a small fraction of the over 10 million workers in the country have some form of pension cover.

He emphasised that pension was critical to guarantee retirement income security and provide a safety net during difficult economic periods.

Mr Adakurugu noted, "Pensions can help reduce poverty and inequality. They also support economic growth by channelling savings into investments."

He called on all Ghanaians, regardless of their sector of work, to embrace pensions as a necessary part of planning for the future.

On his part, the Chief Executive Officer of the National Pension Regulatory Authority, Mr. Hayford Attah Krufi, said the Authority was committed to nationwide pension awareness to sensitise Ghanaians to deepen their understanding of the new Three-Tier Pension Scheme.

The Executive Secretary of CLOGSAG, Dr. Isaac Bampoe Addo stated that gone are the days when pension fund was invested in bonds, adding that the pension funds should be diversified to other areas.

In Ghana, the pension system follows a three-tier structure. The first tier is the mandatory basic national social security scheme. The second tier is privately managed mandatory occupational schemes. The third comprises voluntary private savings. Experts say expanding pension coverage, especially among informal workers, is key to ensuring adequate retirement benefits for all.

The National Pensions Regulatory Authority is a statutory institution established in 2010 by the National Pensions Act, 2008 (Act 766), with the mandate to regulate and monitor the operation of the 3-tier Pension Scheme and ensure the effective administration of pensions in the country.

The National Pensions Awareness Week, organized by the National Pensions Regulatory Authority, is aimed to educate the public on the importance of pensions and retirement planning. A Pensions Fair was also held, bringing together stakeholders across the pensions industry.