Reform pensions to better reflect age and risk – Fidelity Bank DMD

By Kingsley Webora TANKEH 

Fidelity Bank’s Deputy Managing Director for Wholesale Banking, Kwabena Boateng, has called for a differentiated approach to pension investment strategies based on contributor age as part of broader reforms aimed at insulating the retirement system from economic volatility and political risks.

Speaking at the 2025 Money Summit hosted by Business and Financial Times and themed ‘Optimising investment and pensions management: Strategies for sustainable retirement income and economic growth’, Mr. Boateng urged policymakers and fund managers to move away from a one-size-fits-all approach to pension management.

Instead, he advocated dynamic asset allocation frameworks that reflect the investment horizons and risk profiles of different age groups.

“Younger contributors with a longer investment horizon could potentially benefit from strategies that include a higher allocation to growth-oriented assets, while those closer to retirement might prioritise more conservative, income-generating investments,” Mr. Boateng said.

This comes as stakeholders continue to bear the burden of the Domestic Debt Exchange Programme (DDEP), which eroded trust in the domestic bond market and adversely impacted pensioners whose investments were largely tied to government securities.

Fidelity Bank’s DMD stated that the experience underscored an urgent need to diversify pension portfolios beyond sovereign debt instruments.

He noted that current practices limit the ability of pension funds to unlock higher value for contributors and channel capital into long-term, high-impact sectors such as infrastructure, private equity, private debt and green financing.

“Challenges create opportunities,” he said, signalling the potential for growth if inefficiencies are addressed.

Addressing cost dynamics within the pension fund sector, Mr. Boateng raised concerns over the increasing push to minimise management fees – cautioning that such efforts could come at the expense of service quality and professional oversight.

He expressed support for ongoing deliberations around establishing a minimum fee threshold for pension fund managers, stating that effective and sustainable fund management depends on attracting and retaining skilled professionals.

“Cost matters – but not at the expense of quality. Let us not undermine the very people we need to safeguard our retirement savings,” he stated.

Mr. Boateng also weighed in on macroeconomic policy, arguing that persistently high interest rates – used by the Bank of Ghana to tame inflation – have constrained credit growth, limiting access to finance for households and small businesses.

“Facilitating broader access to capital markets can promote sustainable economic growth without necessarily stoking the inflationary pressures that often accompany rapid credit expansion,” he noted.

He recommended a more “nuanced and sustainable approach” to inflation that reflects the specific structural realities of the Ghanaian economy.

As inflation begins to recede and the cedi shows signs of stabilising, the banker urged policymakers to strengthen the domestic capital market.

He encouraged both SMEs and larger firms to raise medium- to long-term financing through instruments such as bonds and equities, thereby reducing the economy’s over-reliance on bank lending.

He stressed that doing so would “redirect domestic capital into productive economic activities”, enhance financial system stability and buffer the economy against external shocks.

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