President Mills has launched a new pension scheme

President John Evans Atta Mills President Atta Mills has launched the new pension scheme in Accra with a call on regulators to ensure a smooth takeoff. The new three-tier scheme, which starts in January 2009, is to better the pension income security of workers when they retire. It will be managed by a reconstituted Social Security and National Insurance Trust (SSNIT). Launching the scheme on Wednesday, President Mills urged managers of the programme to ensure that it runs without difficulty, especially for the informal sector of the economy. “I would also want to alert the regulatory authority to the heavy responsibilities which have been trashed on them. Especially as regards the informal sector I would expect them to organise a comprehensive education and sensitisation programme to encourage individuals, associations and groups to participate in this scheme,” the president said. The president said he was enthused about the fact that workers would be able to use the lump sum benefits as collateral for mortgages. The new scheme will comprise two mandatory schemes and a voluntary scheme. The first tier basic national social security scheme will incorporate an improved system of SSNIT benefits and shall be mandatory for all employees in both the private and public sectors. The second tier occupational (or work-based) pension scheme, mandatory for all employees but privately managed, and designed primarily to give contributors higher lump sum benefits than presently available under the SSNIT or Cap 30 pension schemes. The third tier voluntary provident fund and personal pension schemes, supported by tax benefit incentives to provide additional funds for workers who want to make voluntary contributions to enhance their pension benefits as well as workers in the informal sector. Among other impacts, the new scheme will ensure improved living standards of the elderly; financial autonomy and independence of retirees; increased national savings and availability of long term funds for economic development; and the promotion of growth and development of the capital, mortgage and insurance markets, the National Pensions Bill 2008, has indicated. Story by Fiifi Koomson/Ghana/myjoyonline.com