Omane Boamah points to 4 distortions in Tier 2 pension brouhaha
The Minister of Communications, Dr. Edward Omane Boamah on Monday said the government was duty bound to take keen interest in the management of funds set aside for the protection of citizens when they are old and vulnerable.
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That duty, he said, underlines government's motivation to see to the prudent management of funds accruing to the Tier 2 Pension Scheme and will therefore not shirk that responsibility.
Addressing a press conference on the controversial Tier 2 Pension Scheme that has seen some public and civil servants embark on an indefinite strike, the Communications Minister said the issues have been saddled with "some distortions and falsehoods" in the course of the strike action by workers that needed to be corrected.
He set out to deal with those claims as follows:
1. Distortion: Government has unilaterally, imposed a Trustee on public sector workers.
One of the most deceptive narratives which is often repeated by persons who are not familiar with the actions taken so far to implement the new pensions regime has been that government in violation of provisions of the Pensions Act (Act 766) unilaterally imposed a Trustee on public sector workers.
It is instructive to note however that those who advance this argument often fall short of stating the relevant provisions which government has violated.
Government believing not only in the rule of law but also the fact that the demand by labour unions to choose trustees for the tier 2 pensions will leave the future of workers, especially when they retire, almost entirely at the mercy of private interest; who cannot provide the same guarantee the concern for citizens' welfare compels Government to provide, decided to seek judicial pronouncement on section 129 of the law.
We are unable to dissect the merits and demerits to support our case out of respect for the courts.
We believe a determination of this matter will put to rest any lingering doubt about who has capacity to appoint Trustees to manage Pension Funds. The answer of interpretation as we all know lies in the bosom of the Judge.
2. Distortion: Government is unable to account for Tier 2 contributions deducted so far.
Another distortion of the issue has been that Tier 2 contributions deducted since 2010 cannot be accounted for. The National Pensions Regulatory Authority clarified this matter last week when it addressed a press conference last Thursday.
Pursuant to Section 218 of Act 766, every employer is enjoined to open a Temporary Pension Fund Account (TPFA) into which all Tier 2 deductions will be kept in trust until such time that Trustees are appointed and Fund Managers duly registered. The NPRA disclosed that the total balance on account held by the Bank of Ghana as at 27th October, 2014 is GHS 1,641,117,027.70 and this includes returns accrued after investment in treasury bills.
It is also important to note that workers are adequately represented on the Boards of SSNIT and the NPRA Board by highly respected Trade Unionists and therefore have opportunity to regularly learn about the status of their pension funds anytime they require such information as good corporate governance dictates. The notion therefore that Government has concealed the details of the funds accrued so far, is misleading.
3. Distortion: Government has transferred Pension funds to Pension Trust Alliance to purchase Merchant Bank.
Another falsehood which has been peddled with alacrity, by a Civil Society group and most regrettably by senior figures within the political space who by virtue of the positions they occupy we expect to know better, is that government has handed over pension funds kept at the Bank of Ghana to Pensions Alliance Trust to purchase Merchant Bank.
We wish to state that per information available to Government this claim is totally false, absolutely unfounded, mischievous and was only invented to justify earlier falsehoods. We challenge anybody who has contrary opinion to boldly step forward to contradict this position. We will be ready to revise our position. Until then let us allow decorum and truth to prevail in the discourse.
The funds that have accrued so far are being safely kept by the Bank of Ghana and have been prudently invested for the benefit of pensioners.
4. Distortion: Workers will have choice if Labour Union Leaders are allowed to appoint Trustees and Fund Managers.
This claim cannot be true as what the Labour Unions have done is to also appoint a single trustee each for their various registered schemes and knowing that this is binding on all workers it cannot be true to assert that the Labour Leaders are offering Ghanaian workers the power of choice. Once again this claim has clearly been thrown in the mix just to further obfuscate issues by those who think they stand to benefit in a cloud of confusion. We have a message for them, their machinations will not work!
Dr Omane Boamah said while the private sector has a role to play in protecting pensioners, government was "also guided by bitter case studies in Ghana and across the globe – when bankruptcy sets in, who will bail the poor pensioner out? Who will protect the retirement income security of the pensioner. This is the thrust of Government’s actions. Let us all get to work even as we negotiate, for the two are not mutually exclusive and exhaustive." Click to read the minister's address in full.
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Listen to Dr Omane Boamah addressing the media on Monday.
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