World Bank Supports Ghana To Reform Its Pensions System
ACCRA, June 11, 2018 - Over 25 technical staff from the Social Security and National Insurance Trust (SSNIT), National Pensions Regulatory Authority (NPRA), the Ministry of Finance and the Ministry of Employment and Labour Relations are participating in a four-day workshop organized by the World Bank from June 11th – 14th 2018 on Ghana’s Pensions System and training using the World Bank’s pension model PROST.
“Pensions are crucial in supporting thousands of Ghanaians after retirement. At the same time, sound management of pensions, including a well-developed policy and a program of appropriate reforms will be critical to get on the path to Ghana Beyond Aid” said World Bank Country Director for Ghana, Henry K.G. Kerali. “The World Bank is therefore committed to working with the Government of Ghana on developing a smarter and sound pensions system that is affordable for the economy and protects the elderly.”
Mr Kerali in his welcome remarks stated that the World Bank’s analysis indicates that SSNIT is currently spending about 1% of GDP on providing pensions, which support about 0.4% of the population. This, he noted, does not include other pension spending in Ghana for retirees of some of the public services. Mr Kerali stated that 20% of Ghana’s population will in future need old age support, this will require a proportionately higher expenditure. It is therefore critical to take a close look at what changes might be made now, before workers join the system with the expectation of a pension upon retirement.
The workshop and the follow-up Pensions Reform Options Simulation Toolkit (PROST) training is the result of a fruitful, multi-year technical engagement the World Bank has had with the Government of Ghana. It seeks to provide a rigorous and detailed exploration of potential areas of improvement of Ghana’s pensions system.
“We are introducing some critical reforms to the pension regime in line with our medium-term development objectives. These include transfer of all Temporary Pension Fund Account (TPFA) Funds held at Bank of Ghana to the Custodian Banks of Registered Schemes, Unification of all multiple public-sector pension schemes, and guaranteeing the sustainability of the three-tier pension scheme,” said Minister for Employment and Labour Relations, Hon. Ignatius Baffour Awuah
The Hon Minister of Employment and Labour Relations in an opening statement reaffirmed the strong collaboration between the Ministry of Employment and Labour Relations and the World Bank in addressing issues relating to the sector. He stressed that the significance of the training workshop cannot be overemphasized because pensions have become topical in our national development discourse and is also one of the most common and a key pillar of the Decent Work Agenda the Government seeks to promote. And therefore, pledged his unwavering commitment to reform the pension regime to safeguard the retirement income security of all workers. Hon. Baffour Awuah commended the World Bank for the laudable initiative, noting that not only is it timely but also relevant and will equip participants with the requisite expertise for pension reforms and pension administration. He added that in the reforms, government will look at expanding pension coverage to the informal sector and work towards the sustainability, equity, and security of Ghana’s pensions regime.
The workshop and training is led by Anita Schwarz, Lead Economist and Himanshi Jain, Analyst from the World Bank Group’s Social Protection and Jobs Global Practice.