Privatisation of Pension Schemes in Ghana

The Institute for Liberty & Policy Innovation (ILAPIL-Ghana) has asked the Government of Ghana to privatise all pension schemes including the Social Security and National Insurance Trust (SSNIT). According to him, it has been established that the management of pension schemes has not been the best, hence the need to privatise the sector. These comment come on the heels of the Economic and Organised Crimes Office (EOCO) investigating the $72 million software saga at SSNIT.

There are concerns that the monies paid for the system have been overpriced, with ICT experts arguing that the cost for the application is outrageous. The software system, which was undertaken in 2012, is, according to SSNIT, meant to provide customers with convenient services. In a statement signed by Peter Bismark Kwofie, Executive Director ILAPI-Ghana, said: “The redistribution of substantial or unsubstantial amount as pay benefits to retired workers are often done via payroll tax revenue by the government.

The government's interposition has led to poor handling of funds, conflict of interest as a supervisor of the scheme, long administrative procedures of receiving one's benefits; sometimes leading to frustration and death and the features of political risks make the pension to creating more aged poverty individuals. “It is of importance that pension funds are independent from government interference except through regulations and consumer protection laws with a robust but innovative and stable legal framework enacted to guarantee individual right. “The introduction of mandatory individual savings account and a voluntary private pension account to create a competitive market of a publicly mandated but a privately administered pension funds held in individual's retirement savings account with a well defined contribution and redistribution would help avoid the immoral, reckless disbursement and procurement of unjustifiable items of contributors’ funds. “This will help enhance domestic savings growth with both contractual and other forms of savings.

Again, commercial and investment banks as well as the insurance entities would be involved to promote competition in private pension fund management to diversify and innovate the macroeconomic arena. Workers must be given ownership right over what they contribute.”

Source: N