The confusion between Government and the twelve Labour Unions regarding the management of the Second Tier Pension Scheme has finally been settled.
This follows a consensus reached by the Joint Committee tasked to work out an amicable and mutual solution to the dispute.
Hon. Haruna Iddrisu, Minister of Employment and Labour Relations, announced this on Tuesday, 10th November, 2015 at a press conference in Accra.
Based on the recommendations of the committee, headed by Mr.Peter Hayibor, the agreement requires that multiple Schemes should be allowed to exist and operate, with board of trustees reconstituted with representation from both parties. The Government was allowed to nominate the chairperson of each of the Boards of Trustees of the four Schemes.
The Committee also recommended that two fund managers be appointed by both Government and workers for each scheme, with Government appointing a custodian for the schemes.
The Minister disclosed that an independent trustee would be nominated by the workers for approval by the Board of Trustees of which the composition of the various Boards of Trustees should be proposed by the employer. According to him, some rules would be amended to reflect the proposals.
For the smooth administration of the Scheme, the Minister stated that each scheme would nominate an administrator, whereas for the educational sector which is the largest of the Schemes, a competent administrator would be nominated by the employer.
According to him, the National Pensions Regulatory Authority has transferred funds from the Temporary Pension Fund Account (TPFA) at the Bank of Ghana to two employer sponsored schemes in the private sector.
He said the trustees of the beneficiary Schemes were responsible for issuing member contribution statement to workers through their employers.
The Authority, according to him, had put in place mechanisms for resolution of post transfer issues with the trustees. Members were requested to channel their concerns to their trustees through their employers.
“Currently, 18 applicants made up of four (4) master trust schemes and fourteen (14) employer sponsored schemes are going through a due diligence compliance process after which their funds will be transferred” he added.
Agreement reached by the Joint Committee
Based on the Committee’s recommendations, the following broad lines have been agreed by both Parties: the Employer (Government) and the Workers side
1. That multiple schemes should be allowed to exist and operate with the following variations;
- The Board of Trustees of each institution shall be reconstituted with representatives from Employers and Workers
- The Employer shall nominate the Chairperson for each of the Board of Trustees of the four schemes
2. That two Fund Managers will be appointed for each scheme, one to be nominated by the Employer and one by the Workers;
3. That the Employer shall nominate the custodian for all the four schemes;
4. That an independent Trustee shall be nominated by the Workers for approval by the Board of Trustees;
5. That the composition of the various Boards of Trustees should be as proposed by the Employer;
6. That some rules would be amended to reflect the proposals.
For the smooth administration of the Scheme, the following agreements were also reached
1. That each Scheme would have one Scheme Administrator
2. The respective Labour Union/Association would agree and nominate a Scheme Administrator for three of the schemes, namely
- Health Sector
- Judicial Service
3. For the Educational Sector, the largest of all, the Employer, (Government) will nominate one competent Administrator
The Forum had entertained the fears that its rank and file may not be satisfied if the Pensions Alliance Trust was solely selected by the Employer (Government) as Trustee for the Educational Sector Scheme Administrator.
Transfer from Temporary Pension Fund Account (TPFA)
The National Pensions Regulatory Authority (NPRA) has transferred funds from the Temporary Pension Fund Account (TPFA) at the Bank of Ghana to two Employer Sponsored Schemes in the Private Sector.
The Trustees of the beneficiary Schemes are responsible for issuing member contribution statements to workers through their employers.
The Authority has put in place a mechanism for resolution of post transfer issues with the Trustees. So members of the beneficiary schemes are requested to channel their concerns, if any, to their Trustees through their employers.