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The Managing Director of Stanbic Bank Ghana Limited, Mr Alhassan Andani, has bemoaned the low numbers of pension contributions in the country and further called on stakeholders in the sector to initiate measures that will help attract more contributors onto the pension system.
With a population of more than 27 million, Mr Andani said it was worrying that pension contributors under the tier one scheme, for instance, were less than two million, hence the need for innovative measures to help bring more persons on board.
“The measures should target workers in the informal sector, where majority of the working class are yet to be roped into the consistent contributions towards retirement benefits,” he said at the Graphic Business/Stanbic Bank Breakfast Meeting on pensions in Accra last Monday.
Instead of “targeting persons in suits and jackets” to contribute towards pensions, he said the government and the various schemes should be interested in how they could get informal sector workers to also contribute.
Pension reforms
Under the theme: ‘The Role of Pensions in National Economic Development and Sustainability,’ the breakfast meeting was meant to provide policy makers and stakeholders a common platform to deliberate on happenings in the nascent pensions industry.
It was an initiative of the Graphic Business, in partnership with Stanbic Bank. Busy, a long-term evolution (LTE) mobile data services provider and Labadi Beach Hotel were sponsors.
The views and recommendations made at the event are expected to set the stage for reforms in the pensions sector, which is now enjoying tremendous growth following the introduction of a three-tier scheme in 2010.
The scheme opened up the management of pension fund to the private sector after mandating workers and their employees to lodge their tier two and three contributions with private trustees.
Growth of pension funds
As of July this year, contributions under the tier two and three had totalled GH¢8.3 billion, comprising funds accrued in the Temporary Pensions Fund Account (TPFA) and returns on investments, mostly government securities and total assets under management (AUM) by the various licensed trustees.
While the growth is welcoming news for the economy, given the multiplier effects, Mr Andani said a small number of contributors should be of concern to all.
“If you check data with theSocial Security and National Insurance Trust (SSNIT) on the list of contributors, you will realise that there are less than two million people contributing. A country with a population of more than 27 million and just less than two million contribute towards pensions.
Doesn’t that frighten us?” he asked at the event chaired by the Chief Executive Officer of the National Pensions Authority (NPRA), Mr Hayford Atta Krufi.
Given the importance of pension contributions to people and the economy at large, Mr Andani said it was critical that more persons were encouraged to contribute to help create a greater pool of funds that could be used as a catalyst for national development.
“I think the state should be more interested in pensions because if we have these large pools of funds readily available, that is when the real meaning of the private sector being the engine of growth can kick in,” he said.
