The National Pensions Regulatory Authority (NPRA) has organised a day’s sensitisation exercise for members of the informal sector in the Western Region on the new pension Act 766 under the theme, “Informal Sector Participation in the Tier 3 Pension Scheme”.
The exercise forms part of the Authority’s mandate to engage stakeholders to enlighten them on the Three Tier Pension Scheme and seek their views to address their concerns in order to improve the Scheme.
The exercise was also to let stakeholders including employees, employers and the public abreast of the Three-Tier Pension Scheme.
Some of the concerns raised by participants include security of the funds as contributed by members, identification and location of Trustees for the Fund, and the lack of knowledge on the amount deducted from the salaries of employees and contributors among others.
Mr Stanley Ogoe, Zonal Head of NPRA for Western, Central and Western North Regions in his presentation explained that the 1st and 2nd Tier Schemes were mandatory for formal sector workers and voluntary for the informal sector workers.
He divulged that contributors of the pension schemes benefit from monthly pension payments on retirement, invalidity and survivor benefits where a lump sum will be paid to the deceased person’s validity nominated beneficiaries, and tax exemptions of up to 35 per cent on their contributions.
He said contributors can transfer their accrued benefits from one scheme to another as they change employment while members of the scheme can also use their future lump sum under the second tier to secure a mortgage for their primary residence.
Mr Ogoe announced that there has been an increase in the annuity period from 12 years to 15 years as well as a reduction of the qualifying contribution period from 20 years to 15 years under the scheme.
He implored employees to insist on their employers to make deductions from their salaries towards pension and not to agree with employers who try to convince them under the pretext that they will give them the money in bulk when they are due for pension.
Mr Ogoe further urged them to ensure that their employers pay their monthly pension contributions regularly and report any challenges to the NPRA for the enforcement of the law.