Only one per cent of informal workforce on pension scheme — Pensions authority

The Chief Executive Officer (CEO) of the National Pensions Regulatory Authority (NPRA), Mr Hayford Atta Krufi, has called for a deliberate national programme that will help change the mindset of the people towards investments, especially pension.

He said although workers in the informal sector constituted 85 per cent of the country’s workforce, only one per cent of them had registered on one pension scheme or another, a situation he described as unacceptable.

“People have little understanding of financial literacy and pension. Also, with happenings in the banking sector and failures with investments, any education that encourages people to put aside some money becomes very difficult,” he noted.

Mr Krufi made the call when he led a four-member team from the NPRA to pay a courtesy call on the Editor of the Daily Graphic, Mr Kobby Asmah, in Accra yesterday.

The visit was aimed at partnering with the Daily Graphic to educate the public on the importance of pensions.

Informal sector

Mr Krufi admonished workers in the informal sector to consider registering on at least one pension scheme, particularly the voluntary one, which is the third tier pension scheme.

He said the third tier scheme was designed to cater for the peculiar needs of workers in the informal sector, adding that they could register with any of the 22 corporate trustees that had been approved and licensed by the authority.

Pension

The NPRA was established in 2009 to regulate both public and private pension schemes, as well as educate the public on the benefits of pensions.

Explaining what the three-tier mandated pension scheme entailed, Mr Krufi said the first tier, which is the basic national social security scheme, was mandatory for all employees in both the private and the public sectors.

The second tier — the occupational pension scheme — was also mandatory for all employees but privately managed and designed primarily to give contributors higher lump sum benefits, he said.

“The third tier is a voluntary provident fund and personal pension scheme, supported by tax benefit incentives that provides additional funds for workers who want to make voluntary contributions to enhance their pension benefits and also for those in the informal sector,” he said.

Commitment

Mr Asmah expressed the commitment to partner the NPRA to change the narrative where people in the informal sector had no interest in planning for their retirement.

“It is extremely important that we intensify our mass education because a significant proportion of the population is not aware of the importance of pension and has not registered on a pension scheme,” he said.

He asked the NPRA to provide the media with accurate and reliable information to better inform the public on pensions.

Financial sector

The Deputy CEO of the NPRA, Mr David Tetteh-Amey Abbey, assured the public of the existence of credible financial institutions handling pensions, adding that the government was sanitising the financial system.

He also asked workers to desist from the habit of claiming their tier-two pension before turning 60, with the excuse of being temporarily unemployed, saying: “We need to save towards our retirement.”

Present at the meeting were the acting Political Editor of the Daily Graphic, Mr Albert Salia; the Deputy Online Editor, Mr Enoch Darfah Frimpong; a representative of the Graphic Sports, Mr George Ernest Asare; the Director of Finance, NPRA, Mr James Addai; the Manager, Corporate Affairs, NPRA, Nana Sifa Twum, and the Assistant Corporate Affairs Manager, NPRA, Mr Frank Anderson.