A total number of 15 employers that have failed to honour their Tier 2 pension contributions of their employees are being processed for prosecution by the National Pensions Regulatory Authority.
This follows warnings to the recalcitrant firms.
According to the NPRA, it has so far however recovered ¢6.2 million from defaulting firms since it issued legal action to them July last year, a move it described as encouraging.
Chief Executive Officer of the NPRA, Hayford Atta-Krufi told the media in a press briefing that quiet a number of employers are not complying with the Tier 2 Pension Scheme.
According to him, this is not good for some employees as they will be denied of pension benefits when they retire.
“The provisions of Act 766 of 2008, mandating employers to register and contribute to the Basic Scheme (SSNIT) and Tier 2 Schemes were not always being complied with, leading to some employees of such establishment being disadvantaged at the period of their lives when they would no longer be able to fend for themselves and negating the authority’s mandate of ensuring retirement income for security workers”.
“Since July 2020, the authority has issued Notices of Intention to take legal action against 60 of defaulting employers as a final reminder to make good their indebtedness or face prosecution”, Mr. Atta-Krufi said.
He however said the response to the final demand notices has been encouraging since about 70% of the defaulting employers who received the demand notices contacted the NPRA and made good either all of their indebtedness or made partial contributions to cover their employees, adding some entities also submitted payment plans.
NPRA completes development of new 5-year strategic plan
Meanwhile, the NPRA has completed the development of a new 5-year strategic plan to guide its operations from 2022 to 2026. It will be themed: “A Visible NPRA, Increasing Coverage and Growing Pension Assets for National Development”.
The strategic plan will be focused on five key thematic areas. They are sustaining the credibility of the authority, ensuring market discipline, ensuring market transparency, increasing pension coverage and ensuring the sustainability of the basic social security.
The CEO said these key results areas are expected to help the authority to achieve the overall goal of the 5-year plan of increasing 40% pensions coverage and 50 billion assets under management of private pensions and ensuring the sustainability of the Basic National Security Scheme by the end of 2026 for national development.
Only 3% of workers in informal economy covered under pension schemes
Per the current statistics, only 3% of workers in the informal sector are covered under pension schemes. This means a huge number of workers in the informal sector will not have access to regular income during their retirement.
This Mr. Atta-Krufi said is not good for the development of the country.