The National Pensions (Amendment) Bill, 2021, has been approved by the legislature. The bill’s goal is to prevent the Ghana National Fire Service, the Police Service, the Immigration Service, the Prisons Service, the Security and Intelligence Agencies, and others from receiving unification pensions.
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The National Pensions Act, 2008 (Act 766) is being modified by the proposed legislation in order to exclude the security services from the pension unification procedure envisioned under section 213 of Act 766.
If approved by the President, the bill will leave the security agencies out of the process’ unification, clearing the way for the creation of a separate system to control pensions in the security and intelligence industries.
On December 10, 2021, the Minister of Employment and Labour Affairs read the bill in front of Parliament for the first time.
The Committee on Employment, Social Welfare, and State Enterprises was given the bill to review and report on.
According to a report, the National Pensions Regulatory Authority (NPRA) board was mandated by subsection (2) of section 213 of Act 766 to ensure the unification of all pension schemes and the full operationalization of the three-tier pension scheme for all public sector employees, with the exception of the Ghana Armed Forces.
The committee took note of the fact that the Ministry of Employment and Labour Affairs set up a Joint Technical Committee on Pension Unification to create the necessary technical tools for the process.
Despite facing the same or comparable risks as their counterparts in the Ghana Armed Forces, officers in the Police Service, Immigration Service, National Fire Service, Prisons Service, and other security and intelligence agencies were not excluded from the pension unification process and were treated similarly to other public sector employees, according to the report.
The committee was informed that attempts to combine pensions during the payment of lump-sum benefits to the first group of retirees from the security services under Tier 2 of the Three-Tier Pension Scheme in 2020 were complicated by significant problems with employee data verification, which caused the entire unification process to stall.
“The Employment Ministry recommended excluding the security agencies from the unification process to pave the way for the establishment of a separate regime to govern pensions in the security and intelligence sector,” it said. “As a result of the challenges that emerged during the pension unification exercise and the unique nature of the security services in general,” it added.
According to the report, the committee noted that the amendment would automatically reinstall the former occupational pension plans for the security services under CAP 30, which were the root of Ghana’s pension distribution disparities. They consequently aim to bring back the laws and programs that were repealed by Act 766.
It listed them as Sections 34 of the Security and Intelligence Agencies Act, 1996 (Act 526), Section 27 of the National Fire Service Act, 2000, and the Ghana Police Pensions Act, 1985 (PNDCL 165), Immigration Service Pensions Act, 1986 (P.N.D.C.L. 226), Prisons Service Pensions Act, 1987 (P.N.D.C.L. 168), and (Act 537).
A Presidential Commission on Pensions was established in 2004 to review the current pension plans in Ghana and make recommendations for a viable pension plan that would guarantee the worker in Ghana’s retirement income stability.
A strike on the labor front over alleged injustices and discrepancies in the pension system for employees of the public sector led to the creation of the panel.
Some employees of the same public sector employer made contributions to the pension plan, but others did not.
In order to determine the impact of the Pensions Ordinance No. 42 of 1950 (CAP 30) pension plan on the Consolidated Fund, the commission also performed an actuarial appraisal of the pension plan.
The 2004 Presidential Commission on Pensions’ actuarial analysis showed that the CAP 30 was unsustainable, unfair, and placing a great deal of strain on the Consolidated Fund.
Because of this, the 2004 Presidential Committee on Pensions suggested that the CAP 30 be phased away.
The National Pensions Act, 2008 (Act 766), which created the Three-Tier Pension System and established the National Pensions Regulatory Authority as the primary enforcement body, was passed as a result of the government’s adoption of the proposed amendments.
The purpose of Act 766 was to establish a uniform set of rules, regulations, and standards for the administration of pensions and related benefits for employees in the public and private sectors. Pension benefits were to be provided to ensure retirement income security for workers, ensure that every employee receives retirement and related benefits as and when due.
The board of the NPRA is required by subsection (2) of section 213 of Act 766 to guarantee that the country’s pension plans are unified in conformity with Regulations adopted under the Act within four years of the Act’s commencement.
By the time the transitional period expired in 2014, the government was supposed to put in place arrangements to move participants of the associated public pension plans onto the Three-Tier Pension Plan.
To unify public sector pensions, the government did not, however, put in place sufficient procedures before January 1, 2015.
