A comparative analysis of pension reforms and challenges in Ghana and Nigeria

Abstract

Ghana and Nigeria recently joined a number of countries that have incorporated fully-funded defined contribution pension programmes into their national social security arrangements. Contemporary analyses of pension reforms, however, continue to focus on middle-income countries in Latin America and Central and Eastern Europe, as well as on Member States of the Organisation for Economic Co-operation and Development, thereby marginalizing recent pension policy reforms in sub-Saharan African countries. This article examines the complete and partial shifts to defined contribution pension programmes in Nigeria and Ghana respectively, and points to a number of contextual and contingency factors that challenge the use of defined contribution schemes as a means to address problems of benefit adequacy in the sub-Saharan African context.i ssr_1394 91..109

Retirement income security under Ghana's three-tier pension model: Assessment of risks and options for reform

“…Financing of the fi rst tier is through employer -employees contributions of 11 per cent plus returns on investment. 21 The most pronounced parametric reform carried out in the SSNIT social insurance was an increase in the overall total employer -employee contributory rates from its original of 17.5 to 18.5 per cent, and a reduction in the total contribution to the SSNIT social insurance scheme from 17.5 to 11 per cent to make 5 per cent available for investment in the second, whereas the remaining 2.5 per cent directed toward fi nancing the country ' s national health insurance program. 1 The Ghanaian government participates in this scheme as an employer, as well as the ultimate guarantor of the tier in the event of insolvency.…”

Extending Ghana’s Pension Scheme to the Informal Sector for Small and Micro Business Operators within Accra Business District: Challenge and Prospects

“…It is therefore not surprising that very serious efforts are being made across the world to engage all manner of business people in pension schemes. Kpessa (2011) also supports the second ranked prospects i.e. membership of pension schemes entitles one to have access to affordable housing scheme.…”

“…The provision of supplementary income for injured or disabled persons who formally held employment positions and also the provision for beneficiaries of deceased working individuals have been a secondary focus of pension policy makers. Kpessa (2011) further defines Pension as a series of periodic money payments made to a person who retires from employment because of age, disability, or the completion of an agreed span of service.…”

“…Those who could get a job in the formal sector must certainly device a way of obtaining an income. The informal sector was seen as the result of manpower surplus in respect of employment in the formal sector (Kpessa, 2011). Within this approach solutions for the problems of the informal sector were usually sought in the sphere of employment and income policies.…”

“…The diagram above shows the trust is in charge of the entire investment chain. The Trust in this case in responsible for the broad asset allocation that is how much of the pool of funds should be invested in fixed income, equity, debt etc (Kpessa, 2011).They also scan through various fund managers, and select one for each asset class, in the view of competition resulting in optimal returns. Pools of funds are not kept by the Pension Trust themselves but rather by an independent bank, which is solely responsible for holding cash assets.…”