IMANI CALLS FOR RESIGNATION OF PENSION BOARD

By Phyllis D. Osabutey

 

THE VICE President of IMANI Ghana, Mr. Kofi Bentil, has called on the entire board of the National Pensions Regulatory Authority (NPRA) to resign for non-performance of their mandate.

According to him, the board has clearly failed to perform its fundamental duties in terms of reference, while giving itself functions which are not its own.

He said in the process, it has caused dislocations in the economy, creating problems for thousands of pensioners, and messing up the system it is supposed to manage, thereby putting the entire population at risk.

This, according to him, is “at least gross negligence of duty”, adding “The evidence shows that there is plain incompetence and misbehavior – doing things you are not supposed to do. Clearly, there is no controversy about that.”

He went on to say that some actions of the NPRA were also illegal because their actions and inactions clearly go behind the law, stressing “Even with what they have arrogated to themselves, which is more or less to manage the pension fund because they are in charge of the funds now, there is plain incompetence in the management of those funds themselves.”

Mr. Bentil was addressing journalists at a forum on the topic: “Why our Pensions are Meager?”, to shed light on happenings regarding the implementation of the new pensions scheme under the National Pensions Act, 2008 (Act 766).

The forum was organized by IMANI in collaboration with the World Bank and the Institute for Financial and Economic Journalists (IFEJ), in Accra on Thursday.

He pointed out that the NPRA, like the Social Security National Insurance Trust (SSNIT), “have failed us. So far, they have not delivered anything on their mandate. Laws have been passed, institutions have been set up, leaders have been appointed, budgets given, monies spent and still the fundamental job has not been done”, he lamented.

He said SSNIT was set up with very good intensions and it has been the most important financial institution that this country has set up but failed abysmally in the purpose of making sure that Ghanaian workers retire with dignity.

Thus, the NPRA was set up to generate or build a new eco system and manage it to ensure that people don’t have the problems that they have.

“We were promised something around 22% and today, what we are seeing is that it is yielding something around 5%. And even though we have tried to check and cross-check what is going on with the money, we haven’t even been able to find out what is happening to all that money”, he intimated.

This, he said, pointed to evidence of incompetence, and potential evidence of illegal acts, hence “The least that we can ask is for full accounting of the stewardship of the people at the NPRA, the board and its management.”

He further stated that if ordinary people did these things, they would lose their jobs and they may be prosecuted, and therefore called on the president to do something about, stressing, “the person who has the responsibility to deal with this is the president.”

He wondered why Nigeria with a higher number of pensioners than Ghana was able to fix its pension scheme within a quarter and now collecting billions in pension while Ghana had spent close to three years with no concrete results.

The IMANI Vice President said the workers of Ghana need a proper explanation of what has happened and what will happen going forward to secure their pensions, saying, “If we get this pension thing right, we could transform this economy.”

What is however needed is to who ask the people in charge to just do their jobs and put the right people in place to prosecute this agenda which can affect and indeed will affect everybody’s life in this country, he noted.

Also, the former CEO of the NPRA, Dr. Dan Seddoh, said there were conceptual challenges in terms of differentiating between a private scheme and a commercial scheme, a closed pension scheme and an open pension scheme, the role of Trustees and Fund Managers, the role of Corporate Trustees among others.

According to him, the conceptual challenges were serious and they had to be admitted and sorted out before strides could be made, adding, “We must be careful who is looking after our money.”

He said there were also challenges with the additional guidelines provided for the registration of the schemes and in particular regarding scheme 3, “It is a subtle attempt of directing employers towards licensed Corporate Trustees.”

“It is an afterthought as the individual trustee should have been licensed before the Corporate Trustees, it is an afterthought as the Regulator did not build the capacity to supervise the stand alone schemes. Remember you are being required to transfer responsibility to Corporate Trustee and not the risk”, he pointed out.

He said there was too much emphasis on trustees, especially corporate trustees, warning that though some of them were making promises that they could do far better than SSNIT “we have to be careful and not think that they are magicians that if we give money to them, they can perform wonders.”

In terms of the transitional provisions, he said the Temporary Pension Fund Accounts (TPFA), it’s a good arrangement with focus on the individual and the employer but “the BOG could have been replaced with another universal bank.”

He added that in the current arrangement, engaging SSNIT to receive and transmit contributions cannot be efficient, time value of money is lost in, while some returns on contribution has been sacrificed among others, stressing, “what is critical is the timely investment of the funds.”

In view of these, he recommended that focus should be shifted back to contributors and employers and make them the centre of the discussion, license individual trustees of employer sponsored schemes first, and license employer sponsored scheme.

Additionally, the NPRA should ensure that fund managers and custodians are appointed, discontinue the payment of 5% through SSNIT, carry out thorough reconciliation of individual accounts in the TPFA and validate balances.

Also, they should ensure bank balance agrees with book balance, avoid the zero sum game and return balances to the relevant contributors through their Occupational Schemes.

On his part, the Acting Chief Executive Officer of the NPRA, Mr. Sam Pee Yalley rebutted the claims of Mr. Bentil that workers at the NPRA were incompetent, citing his own educational background and work experience.

With regards to the presentation of his former boss, Dr. Seddoh, he said, “a lot of water has passed under the bridge since he left the NPRA.”

Also, he said the Authority was not focused on corporate Trustees but following due process, adding that his former boss was aware of the many problems including lack of accommodation, few staff among others that inhibited the work of the NPRA from the start.

He assured every Ghanaian worker that the pension industry, especially the 5% lodged in the TPFA was not only safe and secure but intact. He said there was nothing fishy about the process but it was just an administrative arrangement.

He added that the new system of transferring money was being done with little risk, saying, “it is better to be late than to be reckless”, and denied that there was any cost to the contributor in terms of the delays.

He, however, conceded that “we had some logistical challenges but sometimes delays are also important in order not to be reckless.” This, he said was particularly necessary in the verification of the fund managers, trustees and compliance officers.

He observed that the NPRA was opened to discussions that would enhance the pension scheme but appealed to people to desist from making claims without evidence and personal attacks.

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