For those who want to understand the impasse between labour unions and government on the tier two pensions scheme, I entreat you to read the National Pensions Act, 2008 (Act 766) and ancillary regulations. SSNIT should only be managing the first tier (basic scheme) and government needs to back out of the second tier. As far as I’m concerned, the monies here need to be vested in a trustee of occupational pension scheme subject to approval by the National Pensions Regulatory Authority (NPRA) given the green light by the Labour Unions with limited government participation. Why does government assume it knows what’s best for the worker? The second tier consists of only 5% out of the total contribution of 18.5% made on behalf of the worker. Shouldn’t we be more concerned with how SSNIT manages (or continues to mismanage) the bigger 13.5%?
EXTRACTS FROM THE ACT:
SECTION 1: ESTABLISHMENT OF CONTRIBUTORY THREE-TIER PENSION SCHEME
1. There is established by this Act, a contributory three-tier pension scheme consisting of
(a) a mandatory basic national social security scheme;
(b) a mandatory FULLY FUNDED AND PRIVATELY MANAGED OCCUPATIONAL PENSION SCHEME, and
(c) a voluntary fully funded and privately managed provident fund and personal pension scheme.
SECTION 4: MANAGEMENT OF THE SCHEMES
- (1) The basic national social security scheme shall operate under the Trust established under section 32 of this Act.
(2) The occupational pension scheme, provident fund scheme, personal pension scheme and other PRIVATELY MANAGED PENSION SCHEMES SHALL BE MANAGED BY TRUSTEES approved by the Board.
SECTION 95: OCCUPATIONAL PENSION SCHEME
- For the purposes of this Part “occupational pension scheme” means a pension scheme that is work-based, established under a trust which provides benefits based on a defined contribution formula in the form of a lump sum
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