NPRA baits trustees into informal sector

The National Pensions Regulatory Authority (NPRA) has slashed the registration fee for corporate trustees wishing to operate in the informal sector from GH¢5,000 to GH¢1,000, as part of measures aimed at enticing more trustees to rope non-formal workers into the pension scheme.

The authority has also reduced the individual trustee informal sector licensing fee from GH¢5,000 to GH¢500.

The measures, which took immediate effect, are expected to help encourage high participation of corporate trustees in the informal sector.

The reduction in the licensing fee for trustees interested in the informal sector is also expected to increase the turnover of the schemes and that should lead to good governance. 

The Chief Executive Officer (CEO) of the NPRA, Mr Hayford Attah Krufi, disclosed these on the sidelines of a stakeholder meeting in Accra.

He said the authority had also decided to fix the pension fund managers and custodian’s fees at non-negotiable rates of 0.56 per cent and 0.28 per cent respectively.

It is to help the fund managers and custodians to accumulate enough funds to effectively perform their assigned roles for prudent management of the funds.

With these incentives in place, Mr Krufi said the NPRA now expected the trustees to “leave their comfort zones and enter the informal sector space”.

Sensitisation

Mr Krufi also mentioned that the NPRA had also embarked on an education and sensitisation campaign in the informal sector to bring them on board the pension’s scheme.

“All of these are being carried out with the objective of promoting the coverage of the informal sector workers, and it’s the authority’s hope that trustees will leave their comfort zones and enter the informal sector space,” he stated.

“The authority will continue to work closely with all stakeholders for the development of this industry. Most countries have developed with the help of pension funds and I believe we can do same if we all work together as players to grow the industry,” he added.

Transfer of funds in TPFA

The CEO also indicated that NPRA was closely working towards the transfer of contributions of public sector workers in the Temporary Pension Fund Account (TPFA) to the respective custodians (Banks) of registered occupational pension schemes administered by approved trustees.

He said a number of progressive meetings had been held with key stakeholders, including the trustees of the public sector schemes and their administrators and the Controller and Accountant General’s Department to finalise the processes for the transfer.

Whiles efforts are being made to transfer the accrued contributions in the TPFA, he said trustees of three public sector schemes had received almost GH¢1.14 billion which covered five per cent contributions of public sector workers for the period of September 2016 to March 2017.

He said the authority had also, as of the end of March 2017, transferred an amount of GH¢544.8 million, representing contributions of 250,532 private sector workers from 7,694 employers.

Background to the TPFA

In January 2010, the Temporary Pension Fund Account (TPFA) was set up to provisionally administer Tier 2 contributions pending the licensing of Trustees and the registering of Pension Schemes. Employers from January 2010, remitted five per cent (Tier 2 contributions) of their employees’ salaries to the TPFA. 

This continued for most employers till October 2012, with First Bank being appointed to be the Administrators of the TPFA, with Bank of Ghana serving as the Custodial Bank, with NPRA itself as the Fund Managers of the TPFA.

The National Pensions Regulatory Authority (NPRA) has slashed the registration fee for corporate trustees wishing to operate in the informal sector from GH¢5,000 to GH¢1,000, as part of measures aimed at enticing more trustees to rope non-formal workers into the pension scheme.

The authority has also reduced the individual trustee informal sector licensing fee from GH¢5,000 to GH¢500.

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