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05.11.2008 General News

Pension Reform Committee embarks on outreach programme

By GNA

The Pension Reform and Implementation Committee is embarking on a nation-wide outreach programme to educate the public on the new pension scheme, and to rally support from prospective beneficiaries.

Addressing workers from both formal and informal sectors at Saltpond in the Mfantseman Municipality, Mrs Irene Wontumi, a member of committee said the Presidential Commission on Pensions set up in 2004 recommended a three-tier scheme for workers.

This, she said would help address disparity between the Cap 30 and Social Security and National Insurance Trust (SSNIT) for the formal sector workers on retirement.

Mrs. Wontumi explained that the first tier to be known as State Basic Social Security involved mandatory contributions of 18.5 per cent made up of 13.0 per cent by employer and 5.5 per cent by employee.

She said that 2.5 per cent would go into the National Health Insurance Scheme and 11 per cent for pensions.

Mrs. Wontumi said five per cent would go into the second tier to be known as occupational or workplace scheme which would also be mandatory.

She said the third tier, which is a voluntary or personal scheme, has no fixed rate and was created mainly for people from the informal sector, even though workers from the formal sector could also join it.

She said Pension Regulatory Authority would be established to manage the new system and fund managers would be engaged to determine the application of the funds for the second tier to yield dividends.

Mrs Wontumi said workers who were above the 55 years old were not qualified to benefit from the new pension scheme, which would take off next year.

She said some experts were engaged to work out how previous contributions made by workers could be fixed into the new system.

Mrs Wontumi said that contributors could use the occupational pension scheme or the second tier as collateral to access loans.

Chief Musah Adam, also a member of the committee, gave the assurance that safety features had been put in place to prevent misuse of the pension funds.

He explained that contributions from the informal sector would be divided into two, with one going into personal savings and the other into retirement account, which could be converted into monthly pension for contributors.

Mr Robert Quainoo-Arthur, Mfantseman Municipal Chief Executive, advised workers to keep their employment documents safely in order not to be found wanting when asked to produce them for processing of their retirement benefits.

He advised workers to start working on their claims about a year to retirement.

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