National Pensions Regulatory Authority to increase retirement age

National Pensions Regulatory Authority says they are considering proposals to increase the retirement age from the current 60years.

They are also looking at increasing the deductions made from the workers' salary for the scheme.

These considerations are being made as a result of challenges facing the SSNIT pension scheme

Chief Executive of National Pension Regulatory Authority Hayford Attah Krufi said there is a need for a national dialogue about the issue.

“If you train an expert and the person can give a lot more at 60 and you ask them to go home, they will go into some consultancy and they may even come back to the same business and charge you higher.”

“In Europe, a lot of countries within the European Union have revised their pension ages and UK, its almost like every year they revise it because the women live longer.”

He added that the situation is worsened by the fact that the rate of retirement is not comparable with the rate of hiring.

“There are people who have a lot of experience at age 60 and then they leave, and then also hiring people to come on board is also not commensurate with the rate at which people are leaving.”

According to him, the deductions even with the current 13%, there are issues of indebtedness.

"These are decisions that cannot be taken by the administrator of the Trust itself, we need to have a national conversation. At the end of the day, when we talk about the contribution it is the employer and the employee their ability to pay. Currently, even with 13% that the employer is paying we've talked about indebtedness, the biggest employer is the government so if the contribution should go up like 19% or 21% it means that the proportion that the individual or the employer will have to pay will go up... there are issues about whether only base salary should be used in computing in paying pension or allowances should also be added..." 

Hayford Attah Krufi in February said although workers in the informal sector constituted 85 per cent of the country’s workforce, only one per cent of them had registered on one pension scheme or another, a situation he described as unacceptable.

“People have little understanding of financial literacy and pension. Also, with happenings in the banking sector and failures with investments, any education that encourages people to put aside some money becomes very difficult,” he noted.

Mr Krufi admonished workers in the informal sector to consider registering on at least one pension scheme, particularly the voluntary one, which is the third tier pension scheme.

He said the third tier scheme was designed to cater for the peculiar needs of workers in the informal sector, adding that they could register with any of the 22 corporate trustees that had been approved and licensed by the authority