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12.10.2005 General News

Presidential Commission on Pensions renew request

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Accra, Oct. 12, GNA - The Presidential Commission on Pensions, has renewed its request to heads of Government Ministries, Departments and Agencies to be more cooperative in supplying it with the exact number of workers in their organisations.

This cooperation is much needed for the commission to effectively carry out its task of examining existing pension arrangements and making appropriate recommendations for a better and more sustainable one. During a forum on Wednesday with workers of the various Government Ministries, Departments and Agencies (MDA) in Accra to discuss the Commission's interim report on pensions in the country, Mr Thomas Ango Bediako, Chairman of the Commission, said one of the unfinished assignments of the Commission was its inability to capture the exact number of people in the public sector.

He said although some heads of MDAs were very cooperative and provided the Commission with the exact number of people within their organisations, "others were over enthusiastic and gave us inaccurate figures."

Mr. Bediako said in spite of repeated requests by the Controller and Accountant-General's Department as well as the Commission, other MDAs did not even bother to supply any information at all, adding that initial figures the Commission got came from the Office of the Head of the Civil Service.

Dr Glover Quartey, Head of Civil Service, urged workers to show keen interest in issues concerning pensions.

He said so long as retiring from the job was a matter of course with every worker within the public sector, gratuity and monthly pension were bound to become very important "one day".

The Commission hopes to meet with all categories of workers within the public sector for joint discussion on the Commission's findings and recommendations concerning the pensions scheme, after which they would come out with a report and recommendations based on contributions and suggestions of the workers.

The nine-member Presidential Commission on Pensions was inaugurated by President John Agyekum kufuor on August 4, 2004 to examine existing pension arrangements and to make appropriate recommendations for a sustainable pension scheme that would ensure retirement income security for Ghanaian workers with special reference to the public sector. To ensure retirement income security for Ghanaian workers, the Commission proposed a three-tier pension structure comprising two mandatory schemes and a voluntary scheme in its interim report which it presented in June 2005.

Under the first Tier, the Commission proposed a restructured SSNIT scheme to be retained as a mandatory State Social Security Pension Scheme which would pay only periodic monthly and other pension benefits with the exception of the 25 percent gratuity lump sum. This was to be a defined scheme, which benefited from a portion of contributions from both the worker and the employer at the ratio of five percent and 12.5 percent respectively.

The second consisted of a mandatory privately managed Occupational Pension Scheme to be a defined contribution scheme, paying mainly lump-sum benefits with the minimum total legislation being legislated but not falling below five percent.

Out of the minimum five percent to be legislated, four percent would be hived off SSNIT, whilst the remaining one percent would be contributed by the employer and the employee. The employer and employee could also negotiate a higher contribution beyond the minimum five percent.

The third Tier consists of a voluntary privately managed personal pension scheme offering attractive tax incentives.