..to self-manage pension
Accra, Sept. 21, GNA - The Presidential Commission on Pensions has endorsed the request of the Armed Forces to be permitted to self manage their pension scheme so as to ensure efficiency and improved service delivery.
However, it said, the operations must be open to periodic audits by the Auditor-General's Department, while a new set of rules and regulations were strictly adhered to, which would ensure that good governance, transparency and effective control were strictly adhered to. This is included in the interim report the nine-member Commission presented to President John Agyekum Kufuor last June and outdoored in Accra on Wednesday.
The Commission noted that despite the rosy picture painted with regard to the benefits of CAP 30, the scheme attracted a large measure of criticism from both pensioners and public servants as a result of the long benefit processing lead-times, over-centralisation of the administration in Accra, the limited and discriminatory coverage, lack of transparency and inadequate levels of communication with pensioners. "Benefits under the scheme have no actuarial basis and gratuity (lump-sum) payments are made without regard to the time value of money."
Ghana operates two public sector pension schemes - CAP 30 and Social Security and National Insurance Scheme.
CAP 30 is currently contributory for some beneficiaries and depends on the Consolidated Fund for payments of benefits. "The Commission recognises the fact that getting funds from State coffers to pay pensions and other benefits to CAP 30 beneficiaries, most of whom do not make any contribution, is fraught with difficulties and poses a danger to the sustainability of the scheme."
The Commission recommended that in the event of the establishment of a new pension structure for public sector workers, the Controller and Accountant-General's Department would continue to pay gratuities (lump-sum) to the remaining pensionable officers employed before 31st December, 1971 and all those who are already on the CAP 30 scheme. "Pensioners under CAP 30 will also continue to receive their benefits under the scheme. To do this effectively, the Pensions Unit under the Controller and Accountant-General's Department should undergo restructuring to benefit from improved governance and administrative practices."
The Commission recommended that both the SSNIT and CAP 30 schemes implement an active policy on pension scheme communications, involving the provision of user-friendly scheme documentation and annual benefit statements.
It endorsed the proposal for a decentralised management and a fully restructured administrative system for public sector pensions, in particular CAP 30, ensuring that the appropriate professional managerial capacity is built in the regional and district capitals and within the Ministries, Departments and Agencies to facilitate pension management. On the retirement age of 60 years, the Commission said it did not recommend a change in the current arrangements applicable to the public sector.
It endorsed the existing constitutional provision that allowed discretionary powers to heads of public organisations to reengage active persons with the required expertise and skills in specific professions. 21 Sept. 05
NSOC 18 Social Pension Health Government urged to note impact of NHIS levy on SSNIT
Accra, Sept. 21, GNA - The Government should take a serious note of the impact of the 2.5 per cent National Health Insurance Scheme Levy on the Social Security and National Insurance Trust (SSNIT) Scheme, the Presidential Commission on Pensions has recommended. The Commission said in its Interim Report released on Wednesday that it gathered from a study conducted by SSNIT to assess the financial impact of the 2.5 per cent contribution to the NHIS that it would have an adverse impact on the Scheme as currently structured. It said with the NHIS levy, the fund ratio would decline from 6.96 in 2004 to 1.23 by the end of the projection period, which is 2050. Without the NHIS levy, however, the fund ratio would increase from 9.58 in 2004 to a maximum of 10.14 in 2009 and finally decrease to 5.55 in 2050.
"Be as it may, the SSNIT Scheme has the inherent capacity to remain viable and sustainable," the Commission said, but added that several challenges must be confronted to remove the threats to its sustainability.
These include high administrative costs, poor returns on investments, the burden of the students' loan scheme, the 2.5 per cent NHIS contribution and political interference in the management of the scheme.
On compensation package for workers, the Commission said any arrangement intended to change the pension system for public employees required a review of the total compensation package, including the wage structure.
This, it noted, formed part of the ongoing Public Sector Reform Programme and recommended the speeding up of the ongoing discussions by the Tripartite Committee on a new national incomes policy, which would provide the basis for a new living wage for the Ghanaian worker. 21 Sept. 05