TUC advocates date change in executing 3-Tier Pension Scheme
The Trades Union Congress (TUC) is calling on government to postpone the full implementation of the three-tier pension scheme, citing some impediments that will affect the implementation.
Currently, under the final implementation modalities, workers who turn 60 years from January 1, 2020 will no longer receive lump sum payments from the Social Security and National Insurance Trust (SSNIT) under PNDC Law 247. Such contributors will have to turn to the fund managers of their second-tier contribution for lump sums.
Speaking at the review of the 2020 budget by TUC, the General Secretary of TUC, Mr. Yaw Baah said, “there are various issues about pension that we have not talked about including data on the pension funds which were held in the Temporary Pension Fund Account (TPFA) at the central bank, as well as unification of pensions, among others key issues.”
“It is for this we are calling on government to allow some time, maybe five or seven years before implementation begins,” Mr. Baah added.
The PNDC Law 247 which enjoins SSNIT to pay the 25 percent lump sum to contributors, sunsets in December 2019. The last group of such workers will turn 60 years by December 31, 2019.
Instructively, this implies that all workers who turn 60 years from next year will have their benefits processed under the three-tier pension scheme (Act 766).
However, in addition to the lump sum from the second tier, SSNIT would be expected to pay a lump sum known as “past credit” accruing from earlier contributions by such workers before the coming into force of the National Pensions Act, 2008 (Act 766), which introduced the three-tier pension scheme.
Even though the law was passed in 2008, it was due to be operationalized from 2010, but the implementation was postponed to kickstart in January 1, 2020.
The TUC has also proposed the establishment of a Labour Bank to support Ghanaian workers to secure decent housing, soft loans and safeguard their welfare.
The Bank, upon establishment, would utilise the experienced retirees in its operations so that the nation would tap into their experiences and offer loans to workers on concessionary rates.
The TUC is still undertaking feasibility studies and has already dispatched two persons to Japan to understudy how that country implemented its Labour Bank model.