In 2006, Ghana began a review of its pension system to identify ways of ensuring better income security for Ghanaian pensioners. The review culminated in the enactment of a new National Pension Act (Act 766) in 2008. The law establishes a new contributory three-tier pension scheme and a regulatory oversight body, the National Pension Regulatory Authority (NPRA), to oversee administration of the composite pension scheme.

Under the law, which remains in force today, 13.5% of an employee’s basic salary is paid to the Social Security and National Insurance Trust (SSNIT) comprising 13% contributed by the employer and 0.5% contributed by the employee) as tier one.

The employee further pays 5% of his basic salary as tier two to an approved private trustee. Tiers one and two are mandatory. A third tier is voluntary, and like tier two, is managed by approved private Trustees, assisted by pension fund managers and custodians licensed by the Securities and Exchange Commission.

The law stipulates that within five (5) years of its enactment, the NPRA shall ensure unification of all other pension schemes operating in the country alongside the three-tier pension scheme. These allied pension schemes include Cap 30, Ghana University Superannuation Scheme, etc. In spite of the comprehensive reforms birthed by the new Act, problems still persist with Ghana’s pension system. First, coverage of formal pension remains low. For example, in 2017, only 14.3% of Ghanaian retirees had access to some form of formal pension, with preceding years recording even lower coverage. Second, the informal sector constitutes an abysmally low percentage of retirees receiving formal pensions. Third, pension coverage is disproportionately skewed in favour of men; for example in 2009, women accounted for only 14.9% of retirees receiving pension, constituting only 1.6% of the total female retiree population. Finally, and perhaps the most emphasised issue with pensions in recent times, is the low amounts paid to retirees as pensions.

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