Top Up Pensions Of 2020 Retirees - TUC

The Trades Union Congress (TUC) has called on the government to take liability for the shortage in the payment of lump sums to pensioners who started retiring from this year under the new pensions law, the National Pensions Act, 2008 (Act 766).
The Secretary-General of the TUC, Dr Yaw Baah, made the call in an interview with the Daily Graphic in Ho yesterday on the sidelines of the Volta/Oti Regional Council Forum on Pensions.

He said it was the stance of the labour union that the government topped up the shortage on pensioners’ past credits and second tier contributions computed under the new law.

Act 766, which replaced PNDC Law 247 that created the Social Security and National Insurance Trust (SSNIT), established a three-tier pension regime, with the mandatory first tier managed by SSNIT and the second and third tiers by private fund managers.

The past credit is the contribution of workers to SSNIT whose retirement took place 10 years after the coming into force of Act 766.

Although the law was promulgated in 2008, its implementation took effect from 2010, making the first batch of retirees who are no longer eligible for SSNIT lump sum being those who retired from this year.

Those people are only entitled to a fraction of contributions they had made since joining the mandatory SSNIT pension scheme, based on a formula approved by the National Pensions Regulatory Authority (NPRA), which the TUC and other labour unions kicked against.

They argued that the past credits of pensioners in 2020, in addition to the second-tier lump sum from private fund managers, did not tally with the benefits they would have received if they had remained under PNDC Law 247.

Wrong computation

Dr Baah said it had come to the notice of labour that the computation of past credits done by SSNIT created shortage in the lump sums received by pensioners in 2020 under Act 766, compared to those who retired and received their benefits in 2019  under the PNDC law.

According to him, it was unjustified for people who retired in 2020 to be paid amounts far lower than what they would have made if they had retired under PNDC Law 247.

He gave instances of some members who retired in 2020 and received paltry lump sums, compared to their juniors in the same organisations who retired in 2019, under PNDC Law 247.

The secretary-general said the one who retired this year took home a lump sum of GH¢39,000, compared to his junior who retired in 2018 with a lump sum of GH¢57,000, even though the senior’s SSNIT contribution was higher and he had contributed more months than the junior.

"The only crime of those receiving these low lump sums is that they retired in 2020, under Act 766, so they deserve to receive their difference back.

“That difference must be paid by somebody, and that somebody is Ghana; therefore, the government must, with immediate effect, pay the difference to pensioners who have suffered this shortage,” he stressed.


According to Dr Baah, the TUC was engaging the government on how to get the right computation of past credits to enable people who might retire in subsequent years to get better lump sums.

"We will do whatever it takes to ensure that every worker who retires is not made worse off. We have written to the President and he has responded. We expect the President to continue the dialogue with us, as we have called for a stakeholder meeting to solicit views and support to be able to address the challenges with regard to past credits, and we hope they will get back to us,” he said.

New law

The secretary-general also pointed out how the objective of the new law to rope in more people into the pension scheme was not working due to low patronage of the third tier designed for individuals to register for personal pension schemes.

“Although the workforce in Ghana is about 13 million people, as I speak to you, only about 1.8 Ghanaians have access to pension, and it is not right; it means the law is not working,” he said, while calling for an action that would enable the large workforce to access pension.


The regional meeting saw the passage of a resolution to demand that the amortisation method used in calculating workers’ lump sum pensions be replaced with PNDC Law 247 to calculate retirees’ lump sum payments to enhance pensions in the country.

The workers again called on the government to take immediate steps to release the Temporary Pension Fund Account which had been locked up at the Bank of Ghana to fund managers.

The TUC also elected new regional executives, with Ms Janet Emefa Obroadibo being elected the new Volta Regional Chairman.


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