Minister of State at the Presidency in charge of Financial and Allied Institutions, Mr. Fiifi Kwetey has inaugurated a five-member steering committee for the National Pension Regulatory Authority (NPRA) to oversee the implementation of a three-year capacity building agreement with the Swiss Government.
The Swiss Government has given a grant of US$2.4 million to Ghana to support the NPRA to adequately perform its role as regulator to ensuring a pension system that protects and promotes the interest of pensioners in the country.
The grant is to strengthen NPRA’s oversight and regulatory functions, build up the human capacity of its staff, and establish a functional organizational structure to support its operations.
The utilization of the grant is also to strengthen NPRA’s critical near and medium-term capacity at the individual, organizational and institutional level.
Mr. Kwetey said as a new regulator, capacity building was necessary to strengthen the organization’s human resource for the effective implementation of the pension’s reforms.
He said the pensions system could serve as a source of economic transformation and a pool for long-term funds to spur economic development.
Mr. Kwetey expressed government’s appreciation to the Swiss government for the largely technical support.
Ms. Brigitte Cuendet, Head of Cooperation, Embassy of Switzerland, said a state of the art pensions system was a cornerstone in the country’s long awaited policy on aging.
She said as people tend to live longer, it is the ultimate goal for the NPRA to ensure security in retirement income for all Ghanaians in both formal and informal sector of the economy.
Ms. Cuendet said strong and well-regulated pension sector facilitates the development of financial markets, in particular local capital markets, through diversifying sources of funds, mobilizing long-term savings for productive purpose and broadening the investor base.
She said strengthening the capacity of the NPRA to regulate and monitor the pension sector would contribute both to the soundness of the financial system and the longer-term fiscal sustainability, which were essential framework conditions for sustainable economic growth.
Besides, she said, “the agreement provides the opportunity to share experiences between the two countries.”
The National Pension Act establishes a new three-tier pension scheme with a first mandatory basic national social security scheme; a second and third tiers that are mandatory occupational pension scheme; and a third tier voluntary pension scheme.
The second and third tiers are managed by licensed private pension providers. The new scheme is in line with international best practices and has high similarities to the Swiss pension model.
The Act establishes the Social Security and National Insurance Trust (SSNIT), Licensed Trustees, Registered Pension Fund Managers and Pension Act to represent the most significant reform in the financial sector over the last couple of years.
The NPRA plays a pivotal role in the new system but faces challenges of a still young institution given the crucial importance of a well-functioning pension system in poverty alleviation.
Members of the committee are Dr. Nii Kwaku Sowa, Chairman NPRA Board, Ms. Brigitte Cuendet, Head of Cooperation Switzerland Embassy, Mr. Laud Senanu Acting CEO NPRA, Mr. Joseph Chognuru, Head of Financial Sector Division Ministry of Finance, and Mr. Ernest Amartey Vondee of the NPRA.