Government to punish employers who refuse to pay pension for employees

The Ministry of Employment and Labour Relations is set to take legal action against businesses failing to enroll their employees onto the various pension schemes.

According to the Sector Minister, Ignatius Baffour Awuah, many employees, after their working life, retire with no pension benefits because their employers refuse to pay either tier 1 or 2 obligations.

He is encouraging employees to seek redress by reporting incidents of no pension payment by employers.

Out of 34 million Ghanaians, only 2 million are rolled onto various pension schemes. In the formal sector, some employees refuse to pay the tier 1 and 2 pension premium.

Minister of Employment and Labour Relations, Ignatius Baffour Awuah said legal action will be taken against recalcitrant employers.

“It is your right as an employee to demand payment information about your contributions towards pension. We are aware some companies default in the payment of pensions. If it comes to our notice, the necessary legal punishment will be meted out to them. Employees should report them, so we monitor their employers,“ he said.

Government to punish employers who refuse to pay pension for employees
Leadership of NPRA in a pose with Asantehene Otumfuo Osei Tutu the Second

The National Pension Regulatory Authority (NPRA) has observed an increase in old age poverty among informal sector workers.

The Authority is educating informal sector workers to contribute to the voluntary tier 3 Group or Personal Pension Scheme to secure their pensions.

CEO of National Pension Regulatory Authority (NPRA), Lawyer Hayford Atta Krufi said,“Our aim within five years, is to reach 40% of the informal sector. With the size of the informal sector, a lot of sensitization needs to be done. It is our collective responsibility to curb old age poverty.”

Chairman of the Association of Vulcanizers, Robert Ayittey, lamented the loss of savings during the financial sector cleanup. This according to him has deterred some informal sector players from contributing to the pension fund.

 “We do not trust these pension fund companies and financial institutions. But the Minister has assured us to have confidence in the sector. I will engage and educate members of my association,” he assured.

Government to punish employers who refuse to pay pension for employeesGovernment to punish employers who refuse to pay pension for employees

Meanwhile, the Asantehene, Otumfuo Osei Tutu II wants strict supervision of the activities of the various trustees of pension funds.

He believes this will whip up the interest of the populace in contributing towards their retirement.

“I entreat the NPRA to supervise the business of pension fund management companies. You have a right to demand accountability and transparency from the trustees,” he said. 


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