The newly National Pensions (Amendment) Bill, 2021 passed by parliament which seeks to amend the National Pensions Act, 2008 (Act 766) will exclude the security services from the pension unification process envisaged under section 213 of Act 766.
The security services excluded include: The Ghana Police, Immigration, Prisons, and National Fire services, and security and intelligence agencies.
Meanwhile, according to the sponsors of the bill, the exclusion is due to challenges that emerged during the pension unification exercise and the unique nature of the security services in general, based on which, the Employment Ministry recommended the exclusion of the security agencies from the unification process to pave the way for establishing a separate regime to govern pensions in the security and intelligence sector.
However, the bill is yet to be assented to by President Nana Addo Dankwa Akufo-Addo. When assented to, it will pave the way for establishing a separate regime to govern pensions in the security and intelligence sector.
The bill was read for the first time on Friday, December 10, 2021, after being presented by Mr Ignatius Baffour Awuah, the Minister of Employment and Labour Relations. Consequently, it was referred to the Committee on Employment, Social Welfare and State Enterprises for consideration and report.
The committee was informed that subsection (2) of section 213 of Act 766 mandated the Board of the National Pensions Regulatory Authority (NPRA) to ensure the unification of all pension schemes and the full operationalisation of the three-tier pension scheme for public sector workers, excluding the Ghana Armed Forces.
Joint Technical Committee On the Unification of Pensions
The Committee reported that the Ministry of Employment and Labour Relations established a Joint technical committee on the unification of pensions to develop the required technical instruments for the unification process.
It said although officers in the Police, Immigration, Fire, and Prisons services, as well as other security and intelligence agencies faced the same or similar risks just as their counterparts in the Ghana Armed Forces did, they were not excluded from the pension unification process and were treated the same way as other public sector workers.
An attempt at the unification of pensions during the payment of lump-sum benefits to the first batch of retirees from the security services under Tier 2 of the Three-Tier Pension Scheme in 2020 was fraught with massive employee data verification challenges, which stalled the entire unification process, the report said.
“As a result of the challenges that emerged during the pension unification exercise and the unique nature of the security services in general, the Employment Ministry recommended excluding the security agencies from the unification process to pave the way for establishing a separate regime to govern pensions in the security and intelligence sector.”
Committee Report
Further, the Committee observed that the amendment would automatically reinstate the previous occupational pension schemes of the security services under CAP 30, which was the source of inequities in the delivery of pensions in Ghana.
Accordingly, the amendment sought to reinstate the enactment and schemes that ceased to be in force under Act 766. These include: 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), Section 34 of the Security and Intelligence Agencies Act, 1996 (Act 526); and Section 27 of the National Fire Service Act, 2000 (Act 537).
Presidential Commission On Pensions
It can be recalled that in 2004, a Presidential Commission on pensions was established to examine existing pension schemes in Ghana and recommend a sustainable scheme that would ensure retirement income security for the Ghanaian worker. This was occasioned by agitations within the labour front concerning identified inequalities and disparities within the pension regime for public sector workers.
The commission also conducted an actuarial valuation of the Pensions Ordinance No. 42 of 1950 (CAP 30) to ascertain its impact on the Consolidated Fund.
The actuarial assessment conducted by the 2004 Presidential Commission on Pensions proved that the CAP 30 was unsustainable, inequitable, and exerting tremendous pressure on the Consolidated Fund and recommended that the CAP 30 be phased out.
This culminated in the enactment of the National Pensions Act, 2008 (Act 766), which introduced the Three-Tier Pension Scheme and established the National Pensions Regulatory Authority as the main vehicle for enforcement. The objective of Act 766 was to provide pension benefits to ensure retirement income security for workers, and establish a uniform set of rules, regulations, and standards for the administration of pensions and related benefits.
Subsection (2) of section 213 of Act 766 mandates the board of the NPRA to ensure that pension schemes in the country are unified by Regulations made under the Act within four years after the commencement of the Act.
The Government was expected to institute measures to migrate beneficiaries of the associated public pension schemes onto the Three-Tier Pension Scheme by the expiration of the transitional period in 2014.
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