Posted on: www.dailyguideghana.com
By
William Yaw Owusu
Monday, October 27, 2014
The Tier Two Pension funds which have compelled an
amalgamation of associations within the health and education sectors as well as
judiciary and the civil service to embark on indefinite strike, is taking a new
twist as labour claims that the funds have accrued to GH¢2 billion.
The government has already gone to court but the
striking workers have called the bluff insisting that they will meet them in
court.
The government last week announced that the Temporary
Pension Fund Account (TPFA) or the Tier 2 Pension funds which is being held in
trust at the Bank of Ghana had accrued about GH¢450,000 million.
However, unknown to both the Minister and Deputy
Minister of Employment and Labour Relations, Haruna Iddrisu and Baba Jamal who
had disclosed the figure at a news conference, then Deputy Minister of Finance
Fifi Kwetey had said somewhere in December 2013 that the Pension Fund had
accrued a whopping GH¢1.2billion since 2010.
Interestingly, the government through the central
bank was said to have calculated the amount at 2.2% to arrive at the GH¢450,000
million instead of the Treasury Bill Rate of 15 plus 2% at the time and when Baba
Jamal was told that Fifi Kwetey now the Minister of Agriculture had mentioned a
higher figure, he said the media could ‘go’ with the higher figure.
It was unclear why the BoG decided to calculate the
interest rate at 2.2% instead of the prevailing TB rate which has currently reached
24% in addition to 2% as the negotiated price making it 26%.
The workers are even speculating that the Tier 2
Pension funds have reached almost GH¢2 billion, going by the prevailing TB
rates since they claimed the interest itself accumulated additional value.
The workers say they want the Pension Trust Alliance
being trusted on them by the government saying that they the right to select
where they want to invest their funds.
Sources say the government has been reluctant to
allow the workers to singlehandedly select their own fund managers due to risks
involved after it realized that the amount is getting huge by the day and it
feared once the money gets into the hands of private fund managers, they might
be financially powerful.
Another reason is that government was not ready to
pay the actual interest pegged at the prevailing TB rate of 24% plus 2%.
However, the workers have reiterated their resolve
to stick to the fund managers of their choice who are already registered with
the National Pension Regulatory Authority (NPRA) and asked the government to
desist from undue interference.
IMANI
On Fortiz
As the strike entered its second week, policy
analysis think tank IMANI Ghana has taken on Fortiz, a private equity fund
which controversially bought state-owned Merchant Bank now Universal Merchant
Banks (umb), over the Tier 2 Pension funds.
In a mind-blowing article titled “Fortiz can answer
questions over where millions of Second Tier Pensions may be held”, IMANI threw
a challenge to one Mawuli Hedo, a director of Fortiz who they claimed was also
a director at First Banc, the Tier 2 administrators of the Temporary Pension
Fund Account (TPFA) with the Bank of Ghana serving as the custodial bank to
come out clean on the raging debate.
NPRA
& TPFA
The article said in January 2010, the TPFA was set
up to provisionally administer the Tier 2 contributions, pending the licensing
of Trustees and the registration of the Pension Schemes and employers since
January 2010 remitted 5% (Tier 2 contributions) of their employees’ salaries to
the TPFA.
IMANI said NPRA which has the mandate to license
Corporate Trustees, Fund Managers and Pension Fund Custodians after almost a
3-year wait without much information to workers and service providers,
registered Pension Schemes at the end of October 2012 and full implementation
under the pension reforms Act 766 started in November 2012.
Poor
Investment
“Even though the NPRA indicated that it was going to
invest the Temporary Pension Fund Account, which was being administered by
First Banc, in Treasury Bills pending the registration of Pension Schemes,
provisional statements released by NPRA in October 2012 indicated a return on
investment of 2.75% per annum.” At that time Treasury bill rate was around 15%
raising questions about who pocketed the balance of over 12% interest.
“This was disappointing,” IMANI said adding “given
that the average Treasury bill returns between January 2010 and October 2012
was around 15% per annum.”
“Besides the provisional statement issued back then
covered a period of 18 months instead of the 34 months period (January 2010 to
October 2012) over which contributions had been made into the TPFA. This raises
fundamental questions as to what was done with the proceeds from the TPFA
administered by a director of FORTIZ.”
54
Years And Above
IMANI said one of the serious implications of the situation
was that “people who were 54 years and younger when implementation started in
January 2010 will not get the full value of their lump-sum benefits, upon
retirement at 60.”
“Thus, all Ghanaian workers - both private sector or
public sector workers - who were 54 years old or younger as at January 2010
will not get their full lump-sum benefits from Tier 2 Pension Schemes as NPRA
is still holding on to 58 months of workers contributions and accrued benefits.
There is no word from the National Pensions Regulatory Authority as to when
these funds will be paid to the contributors or even how it will be paid.”
IMANI recommended the auditing of all TPFA activities
by an external auditor and accrued contributions in the TPFA should be transferred
into the registered Tier 2 Pension Schemes selected by the various employers,
asking the BoG to “submit a report on its stewardship of the TPFA.”
SSNIT
Chickens Out
Just as the debate was reaching boiling point, Ernest
Thompson, Director General of the Social Security and National Insurance Trust
(SSNIT) made a desperate appeal to striking public sector workers to return to
the negotiating table and come up with a road map that would solve the current
impasse with government.
According to Joy
FM, Mr. Thompson believed strikes were not the panacea to the ongoing
controversy, hinting the situation might get worse if a lasting solution was
not found as soon as possible, preferring to blame the impasse on the law.
He claimed the law was passed in a rush in December
2008, at a time when the appropriate structures were not put in place to
execute the policy saying "custodians were not registered; trustees were
not registered at the time."
He said at the time the law was passed, the capacity
of the National Pensions Regulatory Authority was even in question and wondered
why the necessary due diligence were not corrected before the passage.
"What has come now is just a tip of the
iceberg," he warned, adding we need patience to resolve the problem.
Sources said if care is taken SSNIT may also be
opened up over dodgy investments, hence Ernest Thompson call for truce.
AG
Sues
The government through the Attorney General on
Friday filed a suit at an Accra High Court to compel the striking workers to
resume work.
Dr. Dominic Ayine, Deputy Attorney General confirmed
the legal action when he said “as government, we cannot dump the consequences
of taking them on. We are keenly aware of the consequences and we will be
taking measures to address those consequences as events unfold.”
He also added that “there is nothing wrong with
having a collision with labour. When labour believes the government is wrong
they don’t back down so I do not see anything wrong with having a collision with
labour; but we have to be fair to ourselves that organized labour can also go
wrong from time to time.”
Kpessah
Whyte’s insults
An NDC member and presidential staffer Dr Kpessah
Whyte almost found trouble for himself when he said on Joy Fm’s newsfile programme at the weekend that leaders of labour
unions lacked the expertise to negotiate forcefully on pension related issues.
Immediately he made the statement, President of
NAGRAT, Christian Addae-Poku called into the programme and condemned Mr Whyte
for his insensitivity.
He had to eat a humble pie when he finally
apologized saying “I don't think the comment was intended to malign or was
intended to cast doubt on anybody. It was made in the context of a specific
policy issue...If they feel insulted then I apologise.”
No comments:
Post a Comment