NATIONAL PENSIONS ACT, 2008 (ACT 766)

NATIONAL PENSIONS ACT, 2008 (ACT 766)

DATE OF PRESIDENTIAL ASSENT:4th December,2008.

DATE OF GAZETTE NOTIFICATION: 12th December, 2008.

AN  ACT  to  provide  for  pension  reform  in  the  country  by  the  introduction  of  a  contributory three-tier  pension  scheme;  the  establishment  of  a  National  Pensions  Regulatory  Authority  to oversee  the  administration  and  management  of  registered  pension  schemes  and  trustees  of registered  schemes,  the  establishment  of  a  Social  Security  and  National  Insurance  Trust  to manage  the basic national social security scheme  to cater for the first tier of the contributory three-tier scheme, and to provide for related matters.

PART ONE

Establishment of Contributory Three-Tier Pension Scheme and National Pensions Regulatory Authority

1. Establishment of contributory three-tier pension scheme

There is established by this Act, a contributory three-tier pension scheme consisting of

(a)      a mandatory basic national social security scheme;

(b)      a mandatory fully funded and privately managed occupational pension scheme, and

(c)    a  voluntary  fully  funded  and  privately  managed  provident  fund  and  personal  pension scheme.

2. Object of the scheme

The object of the scheme is to

(a)      provide pension benefits to ensure retirement income security for workers,

(b)      ensure that every worker receives retirement and related benefits as and when due, and

(c)    establish a uniform set of rules, regulations and standards for the administration and payment of retirement and related benefits for workers in the public and the private sector.

3. Contributions to the Scheme

(1)  An employer of an establishment shall deduct from the salary of every worker in the establishment immediately  at  the  end  of  the  month,  a  worker’s  contribution  of  an  amount  equal  to  five  and  half per centum of the worker’s salary for the period, irrespective of whether or not the salary is actually paid to the worker.

(2)  An  employer  of  an  establishment  shall  pay  for  each  month  in  respect  of  each  worker,  an employer’s  contribution  of  an  amount  equal  to  thirteen per  centum   of  the  worker’s  salary  during  the month.

(3)  Out of the total contribution of eighteen and a half per centum  an employer shall within fourteen days from the end of each month transfer the following remittances to the mandatory schemes on behalf of each worker

(a)    thirteen and half per centum  to the first tier mandatory basic national social security scheme; and

(b)      five per centum  to the second tier mandatory occupational pension scheme.

(4)  The minimum contribution is eighteen and half per centum  of the approved monthly equivalent of the national daily minimum wage.

(5)  Despite any agreement or understanding to the contrary, an employer is not entitled to deduct

(a)      or otherwise recover the employer’s own contribution from the worker’s salary; or

(b)      the worker’s contribution for an earlier contribution period from the salary in respect of a later period.

(6)  An employer is entitled to make deductions under subsection (5) (b) if

(a)      the  failure  to  make  the  deduction  was  due  to  a  false  declaration  made  in  writing  by  the worker at the time of employment; or

(b)      the  failure  to  deduct  the  contribution  was  the  result  of  an  accidental  mistake  or  a  clerical error in which case the deductions shall be made according to the written instructions of a designated officer of the National Pensions Regulatory Authority set up under  section 5 of  this Act.

(7)  Where an employer deducts a contribution from the salary of a worker, the contribution shall be held by the employer in trust for the purpose of this Act until it is remitted to the relevant schemes.

(8)  Subject to guidelines that may be issued by the Board, any person who is not covered under the first or second tier may make voluntary contributions under the third tier.

(9)  A person to whom the first and second tiers apply may in addition to the total contributions being made by the employee and the employer, make voluntary contributions to a scheme under the third tier of the Scheme.

(10)  An employer who fails to remit total contributions within the time stipulated in subsection (3) commits an offence and is liable on summary conviction to a fine of two thousand penalty units or to a term of imprisonment for two years or to both.

4. Management of the schemes

(1)  The basic national social security scheme shall operate under the Trust established under section 32 of this Act.

(2)  The  occupational  pension  scheme,  provident  fund  scheme,  personal  pension  scheme  and  other privately managed pension schemes shall be managed by trustees approved by the Board.

5. Establishment of the Authority

(1)  There  is  established  by  this  Act  a  body  to  be  known  as  the  National  Pensions  Regulatory Authority.

(2)  The Authority is a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name.

(3)  The Authority may for the performance of its functions acquire and hold movable or immovable property and may enter into a contract or any other transaction.

(4)  Where  there  is  hindrance  to  the  acquisition  of  property,  the  property  may  be  acquired  for  the Authority under the State Property and Contracts Act, 1960 (C.A. 6) or the State Lands Act, 1962 (Act 125) and the costs shall be borne by the Authority.

6. Object of the Authority

The  object  of  the  Authority  is  to  regulate  and  monitor  the  operation  of  the  Scheme  and  ensure  the effective administration of pensions in the country.

7. Functions of the Authority

To achieve its object the Authority shall:

(a)      be responsible for ensuring compliance with this Act;

(b)      register occupational pension schemes, provident funds and personal pension schemes;

(c)      issue guidelines for the investment of pension funds;

(d)      approve,  regulate  and  monitor  trustees,  pension  fund  managers,  custodians  and  other institutions that deal with pensions as the Authority may determine;

(e)     establish standards, rules and guidelines for the management of pension funds under this Act;

(f)   regulate the affairs and activities of approved trustees and ensure that the trustees administer  the registered schemes;

(g)      regulate and monitor the implementation of the Basic National Social Security Scheme;

(h)   carry-out research and ensure the maintenance of a national data bank on pension matters;

(I )      sensitise the public on matters related to the various pension schemes;

(j )      receive and investigate complaints of impropriety in respect of the management of pension schemes;

(k)      promote and encourage the development of the pension scheme industry in the country;

(l)        receive, and investigate grievances from pensioners and provide for redress;

(m)      advise government on the general welfare of pensioners;

(n)      advise government on the overall policy on pensions in the country;

(o)      request information from any employer, trustee, pension fund manager or custodian, any other person or institution on matters related to retirement benefit;

(p )      charge and collect fees as the Authority may determine;

(q)      impose administrative sanctions or fines; and

(r)        perform any other functions that are ancillary to the object of the Authority.

8. Governing body of the Authority

(1)  The governing body of the Authority is a Board consisting of

(a)      a chairperson,

(b)      the Chief Executive of the Authority,

(c)      one person nominated by the President,

(d)     a representative of the Ministry responsible for Pensions, not below the rank of a director,

(e)      a representative of the Bank of Ghana,

(f )        a representative of the Securities and Exchange Commission,

(g)      two representatives of Organised Labour

(h)      one representative of the Ghana Employers’ Association,

(i)        one representative of the National Pensioners Association, and

(j )     a  representative  of  the  Attorney-General  and  Minister  for  Justice  not  below  the  rank  of  Principal State Attorney.

(2)  The  chairperson  and  the  other  members  of  the  Board  shall  be  appointed  by  the  President  in accordance with article 70 of the Constitution.

(3)  The  President  may,  in  appointing  the  members  of  the  Board  take  into  account  persons  with experience in the following:

(i)    finance and investment,

(ii)    law,

(iii)    accounting,

(iv)    pension management or actuarial science,

(v)    business administration, or

(vi)    other related areas of expertise.

(4)  The Board shall ensure the proper and effective performance of the functions of the Authority.

9. Tenure of office of members

(1)  A member of the Board shall hold office for a period not exceeding three years and is eligible for re-appointment but a member shall not be appointed for more than two terms.

(2)  Subsection (1) does not apply to the Chief Executive.

(3)  A member of the Board may at any time resign from office in writing addressed to the President through the Minister.

(4)  A  member  of  the  Board,  who  is  absent  from  three  consecutive  meetings  of  the  Board  without reasonable excuse ceases to be a member of the Board.

(5)  The President may by letter addressed to a member revoke the appointment of that member.

(6)  Where a member of the Board is, for a sufficient reason, unable to act as a member, the Minister shall determine whether the inability would result in declaration of a vacancy.

(7)  Where there is a vacancy

(a)      under subsection (2), (3) or (4) or section 11 (2), or

(b)      as a result of a declaration under subsection (6), or

(c)      by reason of the death of a member the Minister shall notify the President of the vacancy and the President shall appoint a person to fill the vacancy.

10. Meetings of the Board

(1)  The Board shall meet at least once every three months for the dispatch of business at the times and in the places determined by the chairperson.

(2)  The chairperson shall at the request in writing of not less than one-third of the membership of the Board  convene  an  extraordinary  meeting  of  the  Board  at  the  place  and  time  determined  by  the chairperson.

(3)  The  quorum  at  a  meeting  of  the  Board  is  seven  members  of  the  Board  or  a  greater  number determined by the Board in respect of an important matter.

(4)  The chairperson shall preside at meetings of  the Board and in the absence of the chairperson, a member of the Board elected by the members present from among their number shall preside.

(5)  Matters before the Board shall be decided by a majority of the members present and voting and in the event of an equality of votes, the person presiding shall have a casting vote.

(6)  The Board may co-opt a person to attend a Board meeting but that person shall not have a voting right.

(7)  The proceedings of the Board shall not be invalidated by reason of a vacancy among the members or defect in the appointment or qualification of a member.

(8)  Subject to this section, the Board may determine the procedure for its meetings.

11. Disclosure of interest

(1)  A  member  of  the  Board  who  has  an  interest  in  a  matter  for  consideration  by  the  Board  shall disclose in writing the nature of that interest and is disqualified from participating in the deliberations of the Board in respect of that matter.

(2)  A member who contravenes subsection (1) ceases to be a member.

12. Establishment of committees

(1)  The Board may establish committees consisting of members of the Board or non-members or both to perform a function.

(2)  A committee of the Board may be chaired by a member of the Board.

(3)  Section 11 applies to members of committees of the Board.

13. Allowances

Members  of  the  Board  and  members  of  a  committee  of  the  Board  shall  be  paid  the  allowances approved by the Minister in consultation with the Minister responsible for Finance.

14. Regional and district offices of the Authority

(1)  The Board may establish regional and district offices of the Authority in each regional capital and in the district determined by the Board.

(2)  A regional or district office of the Authority shall perform the functions of the Authority in the region or district that the Board may direct.

15. Ministerial directives

The Minister may give directives to the Board on matters of policy.

16. Chief Executive Officer

(1)  The  President  shall,  in  accordance  with  article  195  of  the  Constitution,  appoint  a  person  with expertise in pensions, actuarial science, insurance or related field as the Chief Executive Officer of the Authority.

(2)  The Chief Executive Officer shall hold office on the terms and conditions specified in the letter of appointment.

17. Functions of the Chief Executive Officer

(1)  The Chief Executive Officer is responsible for the day-to-day administration of the affairs of the Authority and is answerable to the Board in the performance of functions under this Act.

(2)  The Chief Executive Officer shall perform any other functions determined by the Board.

(3)  The Chief Executive Officer may delegate a function to an officer of the Authority but shall not be relieved from the ultimate responsibility for the performance of the delegated function.

18. Deputy Chief Executive Officer

(1)  The President shall in accordance with article 195 of  the Constitution appoint a person with the relevant academic and professional qualifications and experience in pension matters, insurance, actuarial science or other related fields as the Deputy Chief Executive Officer of the Authority.

(2)  The Deputy Chief Executive Officer shall hold office on the terms and conditions specified in the letter of appointment.

19. Functions of Deputy Chief Executive Officer

The Deputy Chief Executive Officer shall

(a)      perform functions that the Chief Executive Officer may assign, and

(b)      act in the absence of the Chief Executive Officer.

20. Appointment of Solicitor Secretary

(1)  The President shall in accordance with article 195 of the Constitution appoint a Solicitor Secretary for the Authority.

(2)  The Solicitor Secretary shall be

(a)      responsible to the Chief Executive,

(b)      the secretary to the Board,

(c)      in-charge of the Legal department, and

(d)     perform other functions that may be assigned to the Solicitor Secretary by the Board or the Chief Executive.

21. Appointment of other staff

(1)  The President shall in accordance with article 195 of  the Constitution appoint other staff of the Authority that are necessary for the proper and effective performance of its functions.

(2)  Other  public  officers  may  be  transferred  or  seconded  to  the  Authority  or  may  otherwise  give assistance to it.

(3)  The  Authority  may  engage  the  services  of  advisers  on  the  recommendations  of  the  Chief Executive Officer.

22. Funds of the Authority

The funds of the Authority include

(a)      moneys provided by Parliament,

(b)      fines,  fees,  commissions  and  income  accruing  to  the  Board  in  the  performance  of  its functions,

(c)      donations, grants and gifts, and

(d)      any other moneys that are approved by the Minister responsible for Finance.

23. Accounts and audit

(1)  The  Board  shall  keep  books  of  account  and  proper  records  in  relation  to  them  in  the  form approved by the Auditor-General.

(2)  The Board shall submit the accounts of the Authority to the Auditor-General for audit within three months after the end of the financial year.

(3)  The Auditor-General shall, not later than three months after the receipt of the accounts, audit the accounts and forward a copy of the audit report to the Minister.

(4)  The Internal Audit Agency Act, 2003 (Act 658) applies to this Act.

(5)  The financial year of the Authority is the same as the financial year of the Government.

24. Annual report and other reports

(1)  The Board shall within one month after the receipt of the audit report, submit an annual report to the Minister covering the activities and the operations  of the Authority for the year to which the report relates.

(2)  The annual report shall include the report of the Auditor-General.

(3)  The Minister shall, within one month after the receipt of the annual report, submit the report to Parliament with a statement that the Minister considers necessary.

(4)  The Board shall also submit to the Minister any other reports which the Minister may require in writing.

25. Engagement of consultants and experts

The Board may engage the services of consultants or other experts on terms and conditions determined by the Board.

26. Prohibition of unauthorised disclosure of confidential information

(1)  A  person  in  the  discharge  of  duties  under  this  Act  shall  not  disclose  confidential  information obtained by that person unless authorised by the Board to do so.

(2)  A person who contravenes subsection (1) commits an offence and is liable on summary conviction to a fine of two hundred and fifty penalty units or to a term of imprisonment of not more than one year or to both.

27. Power to inspect business premises

(1)  A person authorised by the Board may, for the purpose of ensuring compliance with the provisions of this Act

(a)      between the hours of 8.00 a.m. and 5.00 p.m. enter any premises in which an employer or self-employed person operates business for the purpose of inspection and examination;

(b)      require  a  person  to  produce  a  record  required  to  be  kept  under  this  Act  in  that  person’s possession and inspect and make copies where necessary;

(c)      make inquiries to ascertain whether the requirements of this Act are being complied with by employees and self-employed persons;

(d)      seize anything which appears to be evidence of an offence against this Act; and

(e)      exercise other powers that may be conferred by Regulations.

(2)  Where  premises  are  private  dwellings,  an  authorised  person  may  enter  those  premises  under  a warrant issued by a Court of competent jurisdiction.

28. Budget and work programme

The  Chief  Executive  Officer  shall  not  later  than  six  months  before  the  commencement  of  each financial year prepare and submit to the Board for approval

(a)    a work programme containing a general description of the work and activities that the Board plans to undertake, and

(b)      estimates of the Authority’s expected expenditure and income.

29. Regulations

The Minister in consultation with the Board, may make Regulations for the effective implementation of this Part.

PART TWO

Basic National Social Security Scheme

30. Basic national social security scheme

(1)  The basic national social security scheme shall operate under the Trust established under section 32 of this Act.

(2)  Each worker of an establishment or an institution shall pay a monthly contribution to the social security scheme.

(3)  Self-employed persons who opt to join the scheme shall pay a monthly contribution to the social security scheme.

31. Exemption from the basic national social security scheme

Section 30 does not apply to officers and men of the Ghana Armed Forces and any other person who is expressly exempted by law.

32. Establishment of the Trust

(1)  There is established by this Act a body known as the Social Security and National Insurance Trust.

(2)  The Trust is a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name.

(3)  The  Trust  may  for  the  performance  of  its  functions  acquire  and  hold  movable  or  immovable property, and may enter into a contract or any other transaction.

(4)  Where there is hindrance to the acquisition of property, the property may be acquired for the Trust under the State Property and Contracts Act, 1960 (C.A. 6) or under the State Land Act, 1962 (Act 125) the cost shall be borne by the Trust.

33. Object of the Trust

The object of the Trust is to operate the basic national social security scheme referred to as the social security  scheme  and  other  schemes  as  determined  by  law  on  the  recommendations  of  the  National Pensions Regulatory Authority.

34. Functions of the Trust

To achieve its object the Trust shall

(a)      operate  the  basic  national  social  security  pension  scheme  and  other  schemes  as  may  be prescribed by law;

(b)      have  a  Fund  into  which  shall  be  paid  the  contributions  and  any  other  moneys  as  may  be required under this Act;

(c)    be responsible for the general administration  of the social security scheme and regulations made under it;

(d)      ensure  the  provision    of   social    protection     for   the   working      population      for   various contingencies including old age, invalidity and death;

(e)      be  responsible  for  the  administration  and  investment  of  funds  within  the  framework  of general directives issued by the Board of Trustees and approved by the Authority;

(f)     collaborate  with  other  complementary  social  protection  schemes  in  respect  of  specified operational and administrative functions to achieve efficiency, cost savings and avoidance of duplication of functions;

(g)      have  general  control  of  the  funds  and  investments  of  the  social  security  scheme  and  the management of the Trust; and

(h)      perform any other functions that are ancillary to the objects of the Trust.

35. Governing body of the Trust

(1)  The governing body of the Trust is a Board of Trustees consisting of

(a)      a chairperson,

(b)      two persons nominated by the President, at least one of whom is a woman,

(c)      two representatives of Employers’ Associations,

(d)      four representatives of Organised Labour,

(e)      one representative of National Pensioners’ Association,

(f )     one representative of the Ministry responsible for Finance not below the rank of a Director,

(g)      one representative of the Security Services who is not a member of the Ghana Armed Forces, and

(h)      the Director-General of the Trust.

(2)  The  members  of  the  Board  of  Trustees  shall  be  appointed  by  the  President  in  accordance  with article 70 of the Constitution.

(3)  The Board of Trustees shall ensure the proper performance of the functions of the Trust.

36. Knowledge and understanding of Board of Trustees

(1)  A  member  of  the  Board  of  Trustees  must,  in  relation  to  the  social  security  scheme,  have knowledge and understanding of

(a)      the social security law and any regulations made under it;

(b)      any statement of investment policy for the time being maintained under  section 67 of this Act;

(c)      any other policy document for the time being adopted by the Board of Trustees relating to the administration of the scheme generally.

(2)  The degree of knowledge and understanding required of the Board of Trustees is that necessary to enable the individual to perform the functions as a member of the Board of Trustees of the social security scheme.

(3)  The Trust shall ensure that a member of the Board of Trustees acquires the relevant knowledge through appropriate programmes relating to pensions and trusts.

37. Tenure of office of members

(1)  A member of the Board of Trustees shall hold office for a period not exceeding three years and is eligible for re-appointment but a member shall not be appointed for more than two terms in succession.

(2)  Subsection (1) does not apply to the Director-General of the Trust.

(3)  A member of the Board of Trustees may at any time resign from office in writing addressed to the President through the Minister.

(4)  A member of the Board of Trustees who is  absent from three consecutive meetings of the Board without sufficient reason ceases to be a member of the Board of Trustees.

(5)  The President may by letter addressed to a member revoke the appointment of that member.

(6)  Where a member of the Board of Trustees is, for a sufficient reason, unable to act as a member, the Minister shall determine whether the inability would result in the declaration of a vacancy.

(7)  Where there is a vacancy

(a)      under subsection (2), (3) or (4) or section 39 (2), or

(b)      as a result of a declaration under subsection (6), or

(c)      by reason of the death of a member, the  Minister  on  the  advice  of  the  Board  of  Trustees  shall  notify  the  President  of  the  vacancy  and  the President shall appoint a person to fill the vacancy.

38. Meetings of the Board of Trustees

(1)  The Board of Trustees shall meet at least once every three months for the despatch of business at the times and in the places determined by the chairperson.

(2)  The chairperson shall at the request in writing of not less than one-third of the membership of the Board  of  Trustees  convene  an  extraordinary  meeting  of  the  board  of  trustees  at  the  place  and  time determined by the chairperson.

(3)  The quorum at a meeting of the Board of Trustees is seven members including the Director-General or any other person acting as Director-General.

(4)  The  chairperson  shall  preside  at  meetings  of  the  Board  of  Trustees  and  in  the  absence  of  the chairperson, a member of the Board of Trustees elected by the members present from among their number shall preside.

(5)  Matters before the Board of Trustees shall be decided by a majority of the members present and voting and in the event of an equality of votes, the person presiding shall have a casting vote.

(6)  The  Board  of  Trustees  may  co-opt  a  person  to  attend  a  Board  of  Trustees  meeting  but  that co-opted person shall not vote on a matter for decision at the meeting.

(7)  The proceedings of the Board of Trustees shall not be invalidated by reason of a vacancy among the members or a defect in the appointment or qualification of a member.

(8)  Subject  to  this  section,  the  Board  of  Trustees  may  determine  the  procedure  for  the  Board  of Trustee’s meetings.

39. Disclosure of interest

(1)  A member of the Board of Trustees who has an interest in a matter for consideration by the Board of Trustees shall disclose in writing the nature of that interest and is disqualified from participating in the deliberations of the Board of Trustees in respect of that matter.

(2)  A member who contravenes subsection (1) ceases to be a member.

40. Establishment of committees

(1)  The Board of Trustees may establish committees consisting of members of the Board of Trustees or non-members or both to perform a function.

(2)  A committee of the Board of Trustees may be chaired by a member of the Board of Trustees.

(3)  Section 39 applies to members of committees of the Board of Trustees.

41. Allowances

Members of the Board of Trustees and members of a committee of the Board of Trustees shall be paid allowances approved by the Minister in consultation with the Minister responsible for Finance.

42. Regional and district offices of the Trust

(1)  The  Board  of  Trustees  may  establish  regional  and  district  offices  of  the  Trust  in  each  regional capital and in the districts as the Board of Trustees may determine.

(2)  A regional or district office of the Trust shall perform the functions of the Trust in the region or district that the Board of Trustees may direct.

43. Director-General of the Trust

(1)  The President shall, in accordance with article 195 of the Constitution appoint a Director-General of the Trust.

(2)  The  Director-General  shall  hold  office  on  the  terms  and  conditions  specified  in  the  letter  of appointment.

44. Functions of the Director-General

(1)  The Director-General is responsible for the day-to-day administration of the affairs of the Trust and is answerable to the Board of Trustees in the performance of the functions under this Act.

(2)  The Director-General shall perform any other functions determined by the Board of Trustees.

(3)  The Director-General may delegate a function to an officer of the Trust but shall not be relieved from the ultimate responsibility for the performance of the delegated function.

45. Deputy Directors-General

(1)  The President may appoint for the Trust such Deputy Director-General as may be necessary.

(2)  A Deputy Director-General shall hold office on the terms and conditions specified in the letter of appointment.

46. Appointment of other staff

(1)  The President shall in accordance with article 195 of the Constitution, appoint for the Trust other staff necessary for the proper and effective performance of the functions of the Trust.

(2)  The Trust may engage the services of advisers on the recommendations of the Board of Trustees.

47. Secretary to the Board of Trustees

(1)  The Board of Trustees shall have a Secretary.

(2)  The Secretary shall, subject to the directions of the Board of Trustees, arrange the business for the Board  of  Trustees  and  be  responsible  for  the  recording  and  keeping  of  minutes  of  proceedings  of  the meetings of the Board of Trustees.

(3)  The Secretary shall perform any other functions that the Board of Trustees may direct or as the Director-General may delegate.

48. Internal auditor

(1)  The Trust shall have an internal auditor who shall be responsible to the Director-General.

(2)  The Internal Auditor shall

(a)      prepare a report on the internal audit work carried out at intervals of three months or such shorter period determined by the Board and submit the report to the Board of Trustees;

(b)      make any observations in each report as appear necessary on the compliance, operational and conduct of the financial affairs of the Trust during the period to which the report relates;

(c)      send a copy of each report prepared under this section to the Director-General; and

(d)      perform other functions that the Director-General may prescribe.

49. Actuary of the Trust

(1)  The Trust shall have an Actuary to manage the actuarial functions of the social security scheme.

(2)  The Actuary shall be responsible to the Director-General.

(3)  The Actuary shall

(a)      assess the social security scheme in respect of the

(i)    suitability of the financial system,

(ii)    adequacy of contribution rate,

(iii)    long-term financial solvency of the scheme, and

(b)      perform other functions that the Director-General may assign.

50. Accounts and audit

(1)  The Board of Trustees shall keep books of account and proper records in relation to them in the form approved by the Auditor-General.

(2)  The  Board  of  Trustees  shall  submit  the  accounts  of  the  Trust  to  the  Auditor-General  for  audit within three months after the end of the financial year.

(3)  The Auditor-General shall, not later than three months after the receipt of the accounts, audit the accounts and forward a copy of the audit report to the Minister and the Board.

(4)  The Internal Audit Agency Act, 2003 (Act 658) applies to this Act.

(5)  The financial year of the Trust is the same as the financial year of the Government.

51. Annual report and other reports

(1)  The  Board  of  Trustees  shall  within  one  month  after  the  receipt  of  the  audit  report,  submit  an annual report to the Minister and the Authority covering the activities and the operations of the Trust for the year to which the report relates.

(2)  The annual report shall include the report of the Auditor-General.

(3)  The Minister shall, within one month after the receipt of the annual report, submit the report to Parliament with a statement that the Minister considers necessary.

(4)  The Board of Trustees shall also submit to the Minister and the Authority any other reports which the Minister or the Authority may require in writing.

52. Regulation of the Trust

The Authority shall regulate the activities of the Trust to ensure compliance with the provisions of this Act.

53. Actuarial valuation reports

(1)  The Trust shall obtain actuarial valuations from an external actuary

(a)      at intervals of not more than one year or, if obtained for the intervening years, at intervals of not more than three years, and

(b)      in other circumstances and on other occasions that may be prescribed by the Authority.

(2)  An actuarial valuation is a written report prepared and signed by the actuary

(a)      valuing the scheme’s assets and calculating its liabilities,

(b)      on  developments  affecting  the  scheme’s  liabilities  since  the  last  actuarial  valuation  was prepared.

(3)  The effective date of an actuarial valuation is the date by reference to which the assets are valued and the liabilities calculated.

(4)  The effective date of an actuarial report is the date by reference to which the information in the report is stated.

(5)  The intervals referred to in subsection (1) (a) are between effective dates of the valuation and shall not be more than one year

(a)      after the establishment of the social security scheme, and

(b)      after  the  effective  date  of  the  last  actuarial  valuation,  or,  if  more  recent,  the  last  actuarial report.

(7)  The  Board  of  Trustees  shall  ensure  that  a  valuation  report  is  received  by  them  within  the prescribed period after its effective date.

(8)  A provision in this section shall not affect any power or duty of the Board of Trustees or managers to  obtain  actuarial  valuations  or  reports  at  more  frequent  intervals  in  other  circumstances  or  on  other occasions.

(9)  An  actuarial  valuation  or  report  shall  be  prepared  in  a  manner  to  give  information,  contain statements and satisfy other requirements that may be prescribed by the Board of the Authority.

(10)  The  Board  of  Trustees  shall  ensure  that  any  actuarial  valuation  or  report  obtained  by  them  is made available to the Board of the Authority within thirty days after receipt.

54. Exemption from taxes

The  Trust  is  exempted  from  payment  of  corporate  income  tax  and  subject  to  article  174  of  the Constitution, the Minister for Finance may, with the prior approval of Parliament, waive other taxes in relation to the Trust.

55. Administrative expenses

(1)  The  expenses  related  to  the  administration  of  the  social  security  scheme  except  those  expenses mentioned in subsections (2) and (3), shall be charged on the Fund in accordance with generally accepted accounting practice in relation to pensions, subject to a maximum limit set by the Board of Trustees in line with the general guidelines that may be issued by the Authority and consistent with best practices of similar social security schemes.

(2)  The other expenses related to the provision of support services for other complementary schemes shall be charged to the complementary schemes based on an agreed formula.

(3)  The  administrative  expenses  involved  in  the  transfer  of  the  two  and  half  per  centum   of  the National  Health  Insurance  Scheme  shall  be  charged  to  the  National  Health  Insurance  Scheme  on  a formula to be agreed upon by the National Health Insurance Scheme and the Trust.

56. Permitted expenditure from scheme funds

The  Board  of  Trustees  shall  not  charge  any  expenditure  or  make  any  deductions  from  the  social security scheme funds other than those prescribed by the Authority or authorised under this Act.

57. Account of members

(1)  The Board of Trustees shall cause to be maintained for each member, an account to which shall be credited contributions of that member.

(2)  The  Trust  shall  send  an  annual  statement  of  account  to  members  of  the  social  security  scheme which shall be sent to their current address or the  last known address of the member, except that where the member fails to provide an address, the Trust shall not be under any obligation to send a statement of account to that member.

58. Application of social security scheme

(1)  The social security scheme applies to

(a)      every employer and to each worker employed by its establishment;

(b)      any   other   employer,   worker   and   self-employed   to   whom   the   Social   Security   Act, 1991 (P.N.D.C.L. 247) applied immediately before the commencement of this Act, and

(c)      self-employed persons, who opt to join the social security scheme.

(2)  Where  a  member  has  ceased  to  be  employed,  that  member  may  continue  to  pay  a  monthly contribution at the rate of thirteen and half per centum  of that member’s declared income or salary.

59. Entry age

The  minimum  age  at  which  a  person  may  join  the  social  security  scheme  is  fifteen  years  and  the maximum age is forty-five years.

60. Age exemption

(1)  A worker who is entitled to retirement benefits under a pension scheme in existence before the commencement of this Act and is aged fifty-five years or above is exempt from the scheme.

(2)  Despite  the  provisions  of  subsection  (1)  a  person  who  is  fifty-five  years  and  above  exempted under this Act may opt to join the new scheme.

(3)  For members exempted under subsection (1), the employer and worker shall continue to contribute to the employee’s retirement benefit at the same level of contribution before the commencement of this Act until the worker retires.

61. Social security number

(1)  A worker to whom the social security scheme applies shall be given a Social Security Number on registration with the Trust.

(2)  The  social  security  number  is  not  transferable  and  shall  be  used  by  the  worker  throughout  the working life of that worker and for the purposes of this Act.

(3)  An employer shall not transfer or use the Social Security number of one worker for another.

62. Existing schemes

(1)  The existence of a private or company pension provident fund, superannuation scheme or gratuity scheme in respect of workers to whom this Act applies does not exempt the employer or the workers from the  application  of  this  Act  and  an  employer  is  responsible  for  deducting  contributions  from  the remuneration of workers and paying them along with the employer’s own contributions to the Fund at the rates specified in this Act.

(2)  Despite any other provision, an employer may

(a)     amend  written  provisions  of  an  existing  scheme  with  the  prior  approval  of  the  governing body of the existing scheme or with the consent of the Board of the Authority, or

(b)      adjust  the  benefits  that  may  be  derived  from  the  scheme  to  enable  the  payment  of contributions to be effected under this Act.

63. Mandatory contributions

(1)  An employer shall remit thirteen and half per centum  out of the total contributions of eighteen and a  half per  centum   on  behalf  of  the  worker  to  the  first  tier  mandatory  social  security  scheme  within fourteen days after the end of each month to the Trust.

(2)  The minimum contribution is thirteen and half per centum  of the approved monthly equivalent of the national daily minimum wage.

(3)  Despite subsection (1) the maximum contribution shall not exceed thirteen and half per centum  of a maximum amount that may be determined periodically by the Trust in consultation with the Board of the Authority.

(4)  Out of the total contributions of thirteen and half per centum received on behalf of each member, two and half per centum  shall be deducted and transferred to the National Health Insurance Fund.

(5)  Where  an  employer  deducts  contribution  from  the  salary  of  a  worker,  the  contribution  shall  be held by the employer in trust until remitted to the Trust.

(6)  Payment of contributions by an employer of an establishment to the Trust shall be accompanied with a contribution report in a form that may be prescribed by the Trust including electronic means.

(7)  An employer shall submit the contribution report for that month at the end of that month, whether the contribution is remitted to the Trust or not.

(8)  An  employer  shall  remit  the  total  contribution  of  eighteen  and  one  half  percent  on  behalf  of  a worker who does not qualify to join the social security scheme to the second tier mandatory occupational pension scheme within fourteen days after the beginning of each month.

(9)  Subject to subsection (8) a percentage of the eighteen and one half percent to be determined by the Board of the Authority under the mandatory second tier occupational scheme shall be utilised to purchase an annuity for life from a life insurance company licensed by the National Insurance Commission with monthly or quarterly payments.

(10)  Despite an agreement or understanding to the contrary, an employer is not entitled to

(a)      deduct or recover the employee’s contribution from the worker’s salary, or

(b)      the member’s contribution for an earlier contribution period from the salary in respect of a later period.

(11)  For the purpose of subsection (10), the employer is entitled to make those deductions if the

(a)     failure to make the deduction was due to a false declaration made in writing by the worker at the time of employment, or

(b)      failure to deduct the contribution was the result of a mistake or a clerical error in which case the deductions shall be made according to the written instructions of a designated officer of the Trust.

64. Penalty for non-payment of contributions

(1)  Subject to subsection (2) if a contribution is not paid within the specified period

(a)      a sum equal to three per centum  per month of the contribution payable shall be added to the contribution as a penalty;

(b)      the  Director-General  shall  serve  a  demand  notice  on  the  defaulting  contributor  and  if payment of the contribution and penalty is not made within thirty days after the date of the service   of   the   notice,   the   Director-General   may   proceed   to   collect   and   recover   the contribution and the penalty; and

(c)      if  a  person  without  reasonable  excuse  fails  to  pay  the  contribution  and  a  penalty  imposed under paragraph (a), the Director-General may direct the person to pay an additional penalty of  a sum equal to  three per centum  of  the total of  the outstanding contribution and penalty imposed under that paragraph for each month during which the default continues.

(2)  The Director-General may remit wholly or partly, the penalty imposed under  subsection (1) with the approval of the Board of Trustees.

65. Multiple-employer

Where a worker is concurrently employed by more than one employer, each employer is responsible far only that employer’s obligation under this Act.

66. Employer not to reduce remuneration

An employer shall not by reason of a liability for a contribution to the scheme or for any other charges under this Act or Regulations, reduce whether directly or indirectly, the salary or other emoluments of  a member of the scheme.

67. Investment policy

(1)  The Board of Trustees shall ensure that

(a)      a statement of  investment policy is prepared and maintained for the social security scheme, and

(b)      the statement is reviewed and revised as necessary.

(2)  In preparing or revising a statement of investment policy, the Board of Trustees shall comply with guidelines issued by the authority in consultation with the Board of Trustees.

(3)  A statement of investment policy shall include the

(a)      investment objectives;

(b)      types of securities and other assets that may be acquired;

(c)      the balance between the different types of securities and other assets;

(d)      risk in implementing the investment policy; and

(e)      return expected in implementing the investment policy.

68. Permitted investments

The  Trust  may  invest  the  pension  fund  assets  in  units  of  an  investment  approved  by  the  Board  of Trustees.

69. External investments

Subject to the existing Bank of Ghana foreign exchange rules, the Board of Trustees in consultation with the Minister for Finance may invest pension fund assets outside the country except that the amount to  be  invested  externally  shall  not  exceed  a  percentage  of  the  total  funds  available  for  investment determined by the Authority.

70. Superannuation pension

(1)  A member of the social security scheme who

(a)      retires on attaining the compulsory retirement age of sixty years; or

(b)      retires voluntarily on attaining the age of fifty-five years  and has contributed to the social security fund for a period of not less than fifteen years in the aggregate or one hundred and eighty months in the aggregate is entitled to a superannuation  pension.

71. Invalidity pension

(1)  A member of the social security scheme who becomes an invalid is entitled to invalidity pension if

(a)      the  member  has  contributed  to  the  Fund  for  not  less  than  twelve  months  within  the  last thirty-six months before the occurrence of the invalidity; and

(b)    a  medical  board  certifies  that  the  member  is  incapable  of  normal  gainful  employment because of the permanent physical or mental disability.

(2)  Where a person to whom  subsection (1) applies is subsequently certified by a medical board to have  fully  recovered  and  that  person  has  not  attained  the  compulsory  retirement  age,  that  person  may rejoin the scheme.

72. Lump sum payment

(1)  Where a member of the social security scheme has made less than fifteen years contribution to the Fund before the member retires either compulsorily or voluntarily, the member is entitled to

(a)      a lump sum of money equal to the member’s contribution as benefit; and

(b)      an  interest  of  seventy-five  percent  at  the  prevailing  Government  treasury  bill  rate  on  the lump sum.

73. Survivor’s lump sum benefit

(1)  Where a member of the scheme dies, a lump sum benefit is payable to the deceased’s family who

(a)      are dependants of the deceased; and

(b)      have been validly nominated as beneficiaries of the deceased.

(2)  Where no nomination was made or the nomination made is found to be invalid by the Trust, the lump sum shall be distributed to the dependants in accordance with the Intestate Succession Act, 1985 (P. N. D. C. L. 111).

(3)  Where a deceased member failed to nominate a surviving spouse and children as beneficiaries, the spouse and children may apply to the court for a variation of the nomination to include them.

74. Other benefits

The  Minister  on  the  advice  of  the  Authority  and  in  consultation  with  the  Board  of  Trustees  of  the scheme may by legislative instrument prescribe other classes of benefits.

75. Hazardous employment benefit

A member of the social security scheme who has attained the age of fifty-five years and has been a worker

(a)      at an underground mine;

(b)      at a steel works; or

(c)      in any other employment determined as hazardous employment by the Authority  for an aggregate period of not less than one hundred and eighty months is entitled on retirement to full retirement benefit.

76. Qualifying conditions for pension

(1)  A person who has

  • satisfied the minimum contribution period of not less than one hundred and eighty months,

(b)    attained the age of sixty years or fifty-five years in the case of an underground mine worker or a worker specified in  subsection (2) or has opted for voluntary retirement with reduced  pension, and

(c)      filed an application for superannuation benefit,  is  entitled  to  a  pension  payment  for  each  month  beginning  with  the  first  month  in  which  the  person becomes entitled to the payment.

(2)  A person who has satisfied the minimum contribution period and has worked as an underground mine  worker  or  in  a  quarry  or  in  steel  works  or  in  any  other  employment  and  is  likely  to  contract industrial diseases as defined in section 12 (2) of the Factories, Offices and Shops Act, 1971 (Act 328) by virtue of that employment is entitled to full pension benefit upon attaining the age of fifty-five years.

77. Formula for computation of pensions

(1)  A member may be paid full or reduced pension.

(2)  The minimum pension payment shall be based on fifty per centum  of the average annual salary for the three best years of a member’s working life.

(3)  Where a member works beyond the minimum contribution period, the amount of pension payable shall be increased by one and half percent for every additional twelve months worked up to a maximum of eighty per centum .

(4)  Where  there  are  grounds  to  suspect  that  the  salary  has  been  inflated  with  intent  to defraud, the Trust shall investigate and the right pension based on a formula determined by the Trust shall be paid to the member.

78. Formula for survivors benefit computation

(1)  Where a member dies having made at least twelve months contribution within the last thirty-six months  prior  to  the  death  of  the  member,  a  lump  sum  payment  computed  on  the  present  value  of  the members  pension  for  a  period  of  fifteen  years,  using  the  prevailing  treasury  bill  rate  or  ten  percent, whichever is the lower, shall be paid to the member’s nominated dependants.

(2)  Where a member dies before making at least twelve months contribution within the last thirty-six months, a lump sum equal to total contributions and  interest on the lump sum at the rate of seventy-five per centum  of the Government treasury bill rate shall be paid to the nominated dependants of the member.

(3)  Where a member retires but dies before the age of seventy-five years, a lump sum payment, based on the present value of the unexpired pension of the member not exceeding fifteen years shall be made to the nominated dependants of the member.

79. Formula for invalidity computation

Where a member is certified by a medical board as being invalid, the member is entitled to a pension based on the minimum pension or the earned pension whichever is higher.

80. Periodic review of pensions

The Trust shall annually review the pension payment which shall be indexed to wage inflation rates of active members or another rate determined by the Trust in consultation with the Board of the Authority.

81. Nomination of beneficiaries to receive benefits

(1)  A  person  who  is  required  or  entitled  to  become  a  member  of  the  social  security  scheme  shall furnish to the employer particulars concerning the member’s beneficiaries for the receipt of benefits on the death of that member.

(2)  The  employer  shall  enter  the  particulars  in  the  prescribed  form  and  obtain  the  signature  or thumbprint impression of the person concerned and forward it to the Trust.

(3)  An employer shall ask a potential employee to state in writing

(a)      whether or not that person is a member of the scheme;

(b)      the member’s account number;

(c)    the name and particulars of the last establishment if any, where that person was employed; and

(d)      whether anyone has been nominated to receive the benefits as survivor.

(4)  Where  that  person  was  a  member  of  the  scheme,  the  old  account  number  and  the  nominated beneficiaries shall continue to be operative, and the  Trust’s attention shall be drawn to this by the new employer.

(5)  Subject  to  subsection  (3),  a  member  of  the  scheme  is  free  to  update  the  nomination  and  shall review the nominations at least once every five years and forward the nomination to the Trust.

(6)  Where payment of benefit has been made to a person validly nominated or varied by a Court order under this section, no other person shall have any other claim against the Trust.

(7)  Despite  subsection (6), where a member of the scheme has a child sixty percent of the survivors benefit shall be distributed to the child and forty percent to the persons nominated by the member.

82. Reciprocal agreement

The  Government  of  Ghana  may  enter  into  a  reciprocal  agreement  with  the  government  of  another country in which a scheme similar to the social  security scheme has been established and there may be included in the agreement the following provisions

(a)      that any period of membership of a scheme in the jurisdiction of that government may be treated as a period of membership of the social security scheme and the reverse; and

(b)      that subject to agreed conditions, an amount standing to the credit of a member of the social security scheme in Ghana who works for an employer in the jurisdiction of this country may be transferred to the credit of the member in the scheme in another country and the reverse.

83. Offences

(1)  A person who

(a)     fails or refuses to register any establishment owned or set up by that person or to register any worker under this Act, or

(b)      with intent to evade payment of a contribution or any other amount due knowingly makes a false  statement  or  representation,  or  produces  or  furnishes  or  causes  to  be  produced  or furnished  a  document  or  information  which  that  person  knows  to  be  false  in  a  material particular;

(c)      for  personal  benefit  or  for  any  other  person,  knowingly  makes  a  false  statement  or representation or produces or furnishes, or causes to be produced or furnished, a document or information which that person knows to be false in a material particular;

(d)      fails  without  reasonable  excuse  or  refuses  to  submit  its  contribution  payment  with  a contribution report or accompany contributions to the Trust within the prescribed period in the form and manner prescribed;

(e)      wilfully obstructs or assaults an inspector, officer or servant of the Trust in the discharge of duties; or

(f )     without  reasonable  excuse,  proof  of  which  shall  be  on  that  person,  fails  to  comply  with  a provision of this Act or Regulations made under this Act, is liable on summary conviction

(g)      in respect of an offence under paragraph (a), (b) or (c) to a fine not exceeding the amount of contribution and penalty owed to the Trust or to imprisonment for a term not exceeding five years or both, or

(h)     under  paragraph  (d),  (e)  or  (f )  to  a  fine  not  exceeding  two  thousand  five  hundred  penalty units or to imprisonment for a term not exceeding five years or to both.

(2)  Where an employee of the Trust conspires or aids and abets another person in the commission of an  offence  specified  in  subsection  (1),  the  employee  is  on  summary  conviction  liable  to  the  same punishment as provided under subsection (1).

84. Institution of criminal proceedings

(1)  Criminal  proceedings  under  this  Act  and  Regulations  made  under  it  may  be  instituted  and conducted  by  the  Attorney-General  or  an  officer  of  the  Trust  appointed  by  the  Attorney-General  by executive instrument.

(2)  A Court when convicting a person of an offence under this Act or Regulations made under it may, in  addition  to  the  fine  or  imprisonment,  order  the  person  to  pay  to  the  Trust  the  amount  of  any contribution, together with any interest or penalty on the amount due from that person to the Trust at the date of conviction.

(3)  The amount may be recovered together with the requisite contribution report in the same manner as a fine and shall be paid and credited to the Trust accounts of the members of the social security scheme concerned where applicable.

(4)  The order of payment to the Trust shall be without prejudice to civil remedy.

85. Offences by body of persons

(1)  Where an offence under this Act is committed by a body of persons, in the case of a

(a)      body  corporate,  other  than  a  partnership,  each  director  or  officer  of  the  body  corporate  is deemed to have committed the offence, and

(b)      partnership, each partner of the firm is deemed to have committed the offence;

(2)  A person shall not be convicted of an offence under  subsection (1) if that person proves that the offence was committed without the knowledge of the person or that due diligence was exercised by the person to prevent the commission of the offence.

86. Civil proceedings

(1)  Despite  any  other  law,  a  contribution  to  the  social  security  scheme  along  with  interest  or  a monetary  penalty  payable  or  imposed  for  failure  to  pay  in  time  may  be  recovered  by  action  as  a  debt owed  to  the  Trust  at  any  time  within  twelve  years  after  the  date  when  the  contribution  or  the  penalty became due.

(2)  An action for the recovery of contribution and other penalties under this section may be instituted and conducted by an authorised officer of the Trust.

(3)  Despite any other law, the Circuit and District Courts have power to exercise jurisdiction in civil and  criminal  matters  concerning  social  security  contributions  and  offences  created  under  this  Act irrespective of the amount of claim.

(4)  The Trust may attach the contribution of a borrower or guarantor under the Students Loans Act, 1992 (P.N.D.C.L. 276) for the purpose of the student loans repayment.

87. Priority for payment of contributions

Where on an application—

(a)      by the Trust, an attachment is issued against the property of an employer in execution of a decree  against  that  employer  and  the  property  is  seized,  sold  or  otherwise  realised  in pursuance of the execution, or

(b)      of a secured creditor, the property of an employer is sold,  the proceeds of the sale or any other realisation of the property shall not be distributed to a person entitled to the distribution until the Court ordering the sale or other realisation has made provision for the payment of the amount due by the employer under this Act before the date of the order.

88. Protection against attachment

Except as provided in this Act,

(a)      the accumulations to the credit of a member of the social security scheme, contribution in                transit  to  the  social  security  scheme  or  contributions  with  an  employer,  are  incapable  of being assigned or charged and are not liable to attachment under any law or order of a Court in  respect  of  a  debt  or  liability  by  the  member,  even  in  the  event  of  the  bankruptcy  or insolvency of the member;

(b)      an amount actually or potentially standing to a member’s credit on the social security scheme at the time of the member’s death and payable to the member’s dependants shall be free from attachment before it is paid to the dependants;

(c)      accrued contributions to the social security scheme shall be paid despite the bankruptcy or insolvency of an employer; and

(d)   the protection against attachment of contributions shall not apply to a borrower or guarantor under the Students’ Loans Scheme Law.

89. Exemption from tax

(1)  Tax is not payable by an employer or employee in respect of contribution towards retirement or pension schemes under this Act.

(2)  Tax is not payable on the benefits received under this Act.

(3)  The  social  security  scheme  and  any  existing  scheme  under  this  Act  is  an  approved  scheme  for ascertaining the chargeable income of a person for making the appropriate deductions under the income tax law, and income tax shall not be paid by an employer in respect of a worker on contributions which do not exceed thirteen and one half per centum  of that person’s total salary.

90. Protection for acts done in good faith

A suit or other legal proceedings shall not lie against a member of the Board of Trustees, an officer or employee of the Trust in respect of anything done in good faith in pursuit of the objectives of this Act, except  that  personal  liability  suffered  by  a  trustee  officer  or  employee  acting  in  good  faith  shall  be indemnified by the Trust.

91. Functions of Trust inspectors

(1)  An inspector of the Trust who has reasonable cause to believe that there are workers on premises may  enter  the  premises  at  a  reasonable  time  to  make  an  examination  and  enquiry  necessary  to  obtain information for the purposes of this Act.

(2)  The inspector shall produce identification as an employee of the Trust when making an inspection to obtain information.

(3)  In the discharge of duties under this section, an inspector may require the production of documents related  to  appointment,  attendance,  wages  of  workers  and  contributions  or  liability  of  employers  to contribute to the scheme and take copies of or extracts from the documents.

(4)  Where  an  establishment  has  discontinued  its  work  or  has  been  closed  down  and  does  not  have premises,  the  inspector  may  require  the  production  of  the  documents  related  to  past  transactions  at  a reasonable place and time, including the office of the inspector or the office of any other establishment and the previous employer, or any other person who has custody of the documents shall produce them as required by the inspector.

(5)  Where  it  becomes  necessary  for  an  inspector  to  visit  the  premises  declared  by  a  competent authority  to  be  a  security area or the admission to which is restricted, the inspector shall not enter the premises or area without obtaining prior permission from the officer in charge of the premises.

(6)  Where an establishment is liquidated or wound up or ceases to operate,

(a)      records in relation to the names of the workers,

(b)      the workers’ Social Security Numbers and salaries as defined in this Act, and

(c)      deductions for Social Security contributions  shall be deposited at the Registrar-General’s Department by the employer and the Trust shall be notified by the employer within seven days.

(7)  In this section, an inspector includes a compliance officer or other officers appointed by the Trust to perform the function.

92. Electronic recording and filing and transfer of documents

(1)  The  Trust  has  the  option  to  record,  file,  maintain  or  transfer  in  electronic  form,  records  of members  required  under  this  Act  or  Regulations  made  under  this  Act  and  may  receive  electronic transmitted information in respect of the scheme.

(2)  A system of electronic recording, maintenance, filing or transfer of documents shall provide

(a)      the criterion for authorising persons to file the documents in an electronic form, and

(b)      ensure the security and authentication of the documents filed or transferred.

93. Regulations

(1)  The Minister, on the advice of the Authority and on the recommendation of the Board of Trustees

may,  by  legislative  instrument,  make  Regulations  for  the  purpose  of  carrying  out  the  provisions  and principles of this Part.

(2)  Despite  the  Statutory  Instruments  Act,   1959 (No.  52)  the  penalty  for  the  contravention  of Regulations shall be a fine of not more than two thousand, five hundred penalty units.

94. Transitional provisions

(1)  On the commencement of this Act, the following provisions shall apply

(a)      each person to whom the Social Security Act, 1991 (P.N.D.C.L. 247) applied immediately  before the commencement of this Act shall be credited for the number of months that person has already contributed to the social security scheme;

(b)   where a member retires on reaching the age of  fifty-five years on the coming into operation of this Act without satisfying the minimum contribution period, that person is entitled to a reduced pension, except where that person contributed for a period of not less than twenty years; or

(c)     where  a  member  fails to contribute for the minimum period of twenty years, that member shall  be  paid  the  amount  standing  to  the  members  credit  with  interest  calculated  at  the prevailing treasury bill rate.

(d)      accrued or past service or past credits earned by every contributor to whom the new scheme applies in respect of the 25% lump sum benefit shall have the lump sum determined by a formula agreed between the Pension Reform Implementation Committee and the Trust based on actuarial assessment.

(2)  The rights, assets and liabilities accrued in respect of the properties vested in the Trust established under the Social Security Act, 1991 (P.N.D.C.L. 247) immediately before the commencement of this Act and the persons employed by the Trust are transferred to the Social Security and National Insurance Trust established  under  this  Act  and  accordingly  proceedings  taken  by  or  against  the  former  Trust  may  be continued by or against the Trust.

(3)  A  contract  subsisting  between  the  former  Trust  established  under  the  Social  Security  Act, 1991 (P.N.D.C.L. 247) and another person and in effect immediately before the commencement of this Act shall subsist between the Trust established under this Act and that other person.

(4)  The Board of Directors of the Trust existing immediately before the commencement of this Act shall continue in office until a new Board of Trustees is appointed.

PART THREE

 Occupational Pension Schemes, Provident Fund and Personal Pension Schemes and Management of the Schemes        

95. Occupational pension scheme

For  the  purposes  of  this  Part  “occupational  pension  scheme”  means  a  pension  scheme  that  is work-based, established under a trust which provides benefits based on a defined contribution formula in the form of a lump sum

(a)      payable on termination of service, death or retirement, or in respect of persons covered under section 58 of this Act; and

(b)      payable to or in respect of other persons specified under the second tier of the Scheme as provided for under section 1 of this Act.

96. Mandatory contributions

(1)  Subject  to  section  3 (1)  and  (2)  an  employer  of  an  establishment  shall,  remit  a  mandatory contribution  of  five per  centum   to  approved  trustees  of  occupational  pension  schemes,  out  of  the  total contribution of eighteen and a half per centum  made on behalf of the worker.

(2)  The  contribution  shall  be  remitted  by  the  employer  within  fourteen  days  from  the  end  of  each month.

(3)  The  minimum  contribution  shall  be  five per  centum   of  the  approved  monthly  equivalent  of  the national daily minimum wage.

(4)  Where an employer deducts contributions from the salary of a worker, the contributions shall be held by the employer in trust until remitted to the trustees of the occupational pension scheme.

97. Existing schemes

(1)  The existence of a private or company pension provident fund, superannuation scheme or gratuity scheme in respect of workers to whom this Act applies shall not exempt the employer or the worker from the  application  of  this  Act  and  an  employer  is  responsible  for  deducting  contributions  from  the remuneration of workers and paying them along with the employer’s own contributions to the Fund at the rates laid down in this Act.

(2)  Despite any other provision, an employer may

(a)      amend  written  provisions  of  an  existing  scheme  with  the  prior  approval  of  the  governing body of the existing scheme or with the consent of the Board of the Authority; or

(b)      adjust  the  benefits  that  may  be  derived  from  the  scheme  to  enable  the  payment  of contributions to be effected under this Act.

98. Vesting

(1)  A  contribution  in  respect  of  a  member  of  a  scheme  vests  in  the  member  as  accrued benefits as soon as it is paid to the approved trustees of the scheme.

(2)  Income or profits derived from the investment of the accrued benefits of a member of a scheme by or on behalf of the approved trustee of the scheme shall, vest in the member as accrued benefits when received by that trustee after taking into account any loss arising from the investment.

99. Preservation of accrued benefits derived from contributions

For the purpose of preserving accrued benefits in a scheme

(a)     a trustee of a scheme shall not pay or dispose of any part of accrued benefits to a scheme member or another person except in accordance with the provisions of this Act; and

(b)    an employee or self-employed person shall not have a right or entitlement to accrued benefits except in accordance with this Act.

100. Portability of accrued benefits

(1)  A member of an employer sponsored scheme who ceases to be an employee shall, elect to have the member’s  accrued  benefits  transferred  to  another  scheme  in  accordance  with  the  regulations  of  the scheme.

(2)  Subsection (1) does not apply if a member exercises an entitlement to have the member’s accrued benefit paid to the member on retirement.

(3)  The accrued benefits of a member of the scheme may be transferred

(a)      to another registered scheme to which the member is eligible to belong, or

(b)     to another account within the same scheme, if  permitted or required by regulations of that scheme.

(4)  Where the accrued benefits of a member of a scheme are to be transferred, the approved trustees of the respective schemes shall comply with requirements with respect to the transfer of the benefits.

(5)  An employer shall comply with requirements or regulations with respect to the transfer of benefits if a member of a scheme whose accrued benefits are to be transferred under this section ceases to be an employee.

(6)  The regulations required for the management of a scheme may include

(a)      notices to be given, and

(b)      procedure to be followed, in connection with the transfer of accrued benefits.

101. Qualifying conditions for withdrawal of accrued benefits

(1)  Under the second tier, a member of the scheme who has attained retirement age is entitled to the entire accrued benefits in the scheme in a lump sum.

(2)  A member who has not attained retirement age but has attained the age of fifty years and is not employed or self-employed is entitled to the entire accrued benefits in the scheme in a lump sum.

(3)  A person who is not a citizen of Ghana who does not satisfy the qualifying conditions for a benefit of a scheme but desires to emigrate permanently from this country may be entitled to the entire accrued benefits in the scheme in a lump sum.

(4)  A member of the scheme who

(a)      is retired on the decision of a properly constituted medical board, based on the advice of a suitably qualified physician certifying that the employee is no longer mentally or physically capable of performing the functions of the office; or

(b)      is retired due to total or permanent disability either of mind or body; or

(c)      retires  before  the  age  of  fifty  years  in  accordance  with  the  terms  and  conditions  of employment; is entitled to the entire accrued benefits in the scheme in a lump sum.

(5)  On the death of a member of the scheme, the approved trustee of the scheme shall pay the whole of the member’s accrued benefits as a lump sum

(a)      to the member’s nominated beneficiaries, or

(b)      if there are no nominated beneficiaries, to a person specified in the rules of the scheme.

102. Protection of accrued benefits

(1)  The  accrued  benefits  of  a  member  in  an  occupational  pension  scheme  shall  not  be  attached  in execution of a judgment debt or be used as a charge, pledge, lien, or be transferred, assigned or alienated by or on behalf of the member.

(2)  A disposition that is contrary to subsection (1) is void.

103. Assignment of benefits

(1)  A scheme shall have rules to prevent the assignment of benefit.

(2)  Despite subsection (1) a scheme may allow a member to use that member’s benefit to secure a mortgage for the acquisition of a primary residence.

104. Exemptions from tax

(1)  An  employer  or  employee  shall  not  pay  income  tax  in  respect  of  contributions  on  a  mandatory occupational pension scheme.

(2)  Benefits received under the scheme are not taxable.

(3)  Investment  income  including  capital  gains  from  the  investment  of  scheme  funds  shall  for  the purposes of income tax be treated as deductible income.

(4)  The occupational scheme is a scheme to ascertain the chargeable income of a person to make the appropriate deductions in respect of income tax.

105. Records in respect of contributions

(1)  An employer shall maintain up-to-date records of direct payment arrangement.

(2)  The record shall

(a)   show the rates and due dates of contributions payable under the direct payment arrangement, and

(b)      satisfy prescribed requirements.

(3)  The employer shall, send a copy of that record to the trustees of the  scheme within the prescribed period after the preparation of an up-to-date record.

(4)  Where  an  employer  indicates  in  the  records  that  a  contribution  under  the  direct  payment arrangement has not been paid on or before the due date, the trustees of the scheme shall give notice to the Board and the worker of that fact within fourteen days.

(5)  The trustees of the scheme shall send a member a statement setting out the amounts and dates of the payment made under the direct payment arrangement before the end of the prescribed period.

(6)  An employer who fails to comply with subsection (1), (2) or  (3) commits an offence and is liable on summary conviction to a fine of two hundred and fifty penalty units.

106. Provident fund and personal pension scheme

For the purpose of this Act

(a)      “provident fund scheme” means a scheme governed by a trust to which a contributor or the contributor’s employer or both contribute to a pension scheme which provides benefits based on a defined contribution formula

(i)    to provide for the payment of lump sum benefits to the members of the scheme when they reach the retirement age, or any other prescribed event occurs in relation to them; or

(ii)     in the case of members who die before reaching that age or before the occurrence of such   an   event,   provides   for   the   payment   of   those   benefits   to   the   personal representatives or beneficiaries of the estates of those members,

(b)  “personal pension scheme” means any pension scheme to which the contributor contributes personally  to  provide  benefits  based  on  a  defined  contribution  formula  in  the  form  of pensions  or  otherwise,  payable  on  death  or  retirement  to  or  in  respect  of  persons  covered under section 107 of this Act or their beneficiaries.

107. Application

(1)  A personal pension scheme applies to individuals

(a)     who  want  to  make  voluntary  contributions  to  enhance  their  pension  benefits  outside  the mandatory schemes and any provident fund scheme, and

(b)     in the informal sector who are not covered by any retirement or pension scheme under the mandatory part of the three-tier pension scheme.

(2)  For  persons  under  subsection  (1) (b)  a  portion  of  their  contributions  may  be  accessed  before retirement in accordance with the governing rules of the scheme.

108. Voluntary contributions

(1)  An  employer  may  arrange  for  a  worker  to join  and  pay  contributions  to  a  provident  fund  or personal pension scheme where the worker

  • is more than fifteen years of age,

(b)      is more than the statutory retirement age, or

(c)      is exempted under sections 31 and 60 of this Act.

(2)  The employer is not obliged to pay contributions of a worker under subsection (1) to the scheme.

(3)  Contributions made and returns earned from investment of the contribution shall, be credited to the account of the contributor subject to any deduction of fees.

(4)  Where an employer contributes on behalf of a worker the contribution does not vest in the worker until at the end of the vesting period.

(5)  Subject to subsection (4), an employer’s contributions to a provident fund on behalf of a worker is for that worker.

(6)  Despite subsection (4) in the event of severance by the employer of the employment relationship with the worker, or in the event of liquidation of the employer, an employer’s contributions for its worker shall vest in the worker even if the vesting period has not expired.

(7)  A worker may forfeit part or the total amount of the employer’s contributions if the worker leaves the employment of the employer before the end of the vesting period.

(8)  On the death of a worker before or after the expiry of the vesting period, any accrued benefit of the  worker  shall  devolve  on  the  worker’s  nominated  beneficiary  and  in  the  absence  of  a  nominated beneficiary in accordance with any applicable law.

109. Self-employed persons

(1)  A self-employed person may join and pay contributions to a personal pension scheme if the person is more than the statutory retirement age or is exempted under this Act or is not more than fifteen years of age.

(2)  Contributions  by  self-employed  persons  in  the  informal  sector  who  are  not  covered  under  the mandatory scheme shall be credited to two separate individual sub-accounts

(a)      the personal savings account, and

(b)      the retirement account.

(3)  The proportions to be credited to each account shall be prescribed in the governing rules of the scheme.

(4)  A contributor may withdraw part of the contributor’s personal savings account in accordance with this Act and the governing rules of the scheme.

(5)  The proceeds of the retirement account shall only be paid on the retirement of the contributor as monthly or quarterly pensions.

(6)  The provisions of this Act on accrued benefits and the governing rules of the scheme which do not conflict  with  this  Act  shall  apply  to  accrued  benefits  derived  from  voluntary  contributions  paid  to  a scheme under the provident fund and personal pension scheme.

110. Qualifying conditions for withdrawal of accrued benefits

(1)  A  member  who  has  attained  the  retirement  age  is  entitled  to  the  entire  accrued  benefits  in  the scheme in a lump sum.

(2)  A  member  who  has  not  attained  the  retirement  age  may  withdraw  all  or  part  of  the  member’s accrued benefits from a scheme

(a)    after ten years from the date of first contribution in the case of the provident fund or personal pension scheme for contributors in the formal sector,

(b)      after five years from the date of first contribution in the case of personal pension scheme for contributors in the informal sector, or

(c)      following a certification by a medical board that the contributor is incapable of any normal gainful employment by virtue of a permanent physical or mental disability.

(3)  The beneficiaries of the estate of a deceased contributor may withdraw the accrued benefits of the deceased from the scheme.

111. Retirement benefits

A contributor who is not covered under a mandatory pension scheme or any other pension scheme is entitled to

(a)    use a percentage of accrued benefits, prescribed by the Board of the Authority to purchase an annuity for life payable monthly or quarterly from a life insurance company licensed by the National Insurance Commission, and

(b)      a  lump  sum  payment  from  the  balance  standing  to  the  credit  of  the  contributor’s  accrued benefits or personal savings account.

112. Tax reliefs

(1)  Subject to this Act, contributions made by an employer to a provident fund scheme on behalf of a contributor  shall  be  treated  as  part  of  the  deductible  income  for  that  employer  for  a  tax  year  for  the purpose of income tax.

(2)  Contributions not exceeding sixteen and one half per centum  of a contributor’s monthly income, made by either a contributor or the contributor’s employer or both shall, be treated as deductible income, for  the  purpose  of  income  tax  for  the  contributor  and  the  contributor’s  employer  to  the  extent  of  their respective contributions.

(3)  Persons in the informal sector who are not covered by the mandatory first tier basic national social security scheme and second tier occupational pension scheme, shall have thirty-five per centum  of their declared income treated as deductible income for the contributor for the purposes of income tax.

(4)  Investment  income  including  capital  gains  from  the  investment  of  scheme  funds  shall  for  the purposes of income tax, be treated as deductible income.

(5)  A withdrawal of all or part of a contributor’s accrued benefits under a provident fund or personal pension scheme

(a)      on or after retirement shall be tax exempt;

(b)      shall be subject to the appropriate income tax for contributors in the formal sector before ten years of contributions and before retirement;

(c)      shall be subject to the appropriate income tax for contributors in the informal sector before five years of contributions and before retirement.

(6)  A withdrawal from a scheme at any time after certification by a medical board that the contributor is  incapable  of  normal  gainful  employment  due  to  a  permanent  physical  or  mental  disability  is  tax exempt.

(7)  A withdrawal from a provident fund or personal pension scheme at any time by the beneficiaries of the estate of a deceased contributor is tax exempt.

113. Creation of encumbrance in respect of contribution

(1)  A contributor may pledge or create a charge in respect of a part or all of the contributor’s accrued benefits.

(2)  A  beneficiary  who  enforces  a  pledge  or  charge  created  by  a  contributor  is  liable  for  any  tax applicable to withdrawals under a scheme.

114. Assignment of benefits

(1)  A scheme shall have rules that prevent the assignment of benefit.

(2)  Despite subsection (1) a scheme may allow a member to use that member’s benefit to secure a mortgage  for  the  acquisition  of  a  primary  residence  but  a  member  is  not  liable  to  pay  tax  on  any withdrawal under this section.

115. Duty of employer in respect of personal pension scheme

Despite the provisions of any governing rules or an agreement, an employer shall

(a)    provide the administrative and accounting services  required to enable a worker to join and contribute to a personal pension scheme of the employee’s choice;

(b)    make  appropriate  payroll  deductions  from  the  monthly  salary  of  a  worker  who  desires  to contribute to a personal pension scheme and remit the contributions to the approved trustee of the scheme within fourteen days after the end of the month of deduction; and

(e)    not  mingle  payroll  deductions  with  the  employer’s  own  funds  and  where  an  employer deducts  contributions  from  the  salary  of  a  worker  the  contributions  shall  be  held  by  the employer in trust until it is remitted to the appropriate approved trustee.

116. Monitoring of provident fund contributions

(1)  An employer shall ensure that there is an up-to-date record of direct payment arrangement.

(2)  The record shall

(a)   show the rates and due dates of contributions payable under the direct payment arrangement, and

(b)      satisfy prescribed requirements.

(3)  The employer shall send a copy of that record to the trustees of a scheme, within the prescribed period after the preparation of an up-to-date record.

(4)  The trustees of the scheme shall, give notice  where any contribution shown by the record to be payable  under  the  direct  payment  arrangement  has  not  been  paid  on  or  before  its  due  date  except  as provided.

(5)  The notice shall be given by the trustees to the Board of the Authority and the employees within the prescribed period.

(6)  The  trustees  of  the  scheme  shall  before  the  end  of  the  prescribed  intervals  send  the  member  a statement setting out the amounts and dates of the payments made under the direct payment arrangement during a prescribed period.

117. Life insurers carrying on pension and provident fund business

A life insurer who carries on personal pension and provident fund business shall

(a)   maintain a separate and distinct fund known as the Pensions Fund representing the liabilities of that insurer in respect of pension and provident fund business;

(b)    maintain a separate and distinct account related to the income and expenditure of that insurer in respect of its pension and provident fund business; and

(c)      designate which of the assets of the insurer are to be regarded as assets of the Pensions Fund to  be  clearly  shown  in  the  balance  sheet  or  other  accounts  of  the  insurer  as  assets  of  the Pensions Fund.

118. Winding-up

(1)  In the event of a winding-up of an employer sponsored provident fund scheme,

(a)     contributions made by the employer on behalf of a contributor before the vesting period shall not be available to a liquidator of the employer; and

(b)      unpaid  contributions  of  the  employer  and  payroll  deductions  made  from  the  contributor’s salary which have not been remitted to a trustee at the time of liquidation shall have priority over any other debt.

(2)  Where a scheme is being liquidated

(a)      the  trustee  shall  not  receive  any  contributions  from  the  date  of  the  commencement  of  the winding-up under a scheme managed by the trustee;

(b)     any  schemes  operated  by  the  trustee  may  be  merged  with  a  scheme  operated  by  another trustee with the approval of the contributor and on the directions of the Board; and

(c)    the merger shall be conducted to the other trustee by the transfer of the assets and liabilities of the scheme by the trustee to that trustee.

(3)  Where the registration of a custodian is being withdrawn, the trustee of the scheme to which the Trust relates shall appoint another custodian approved by the Board with the approval of the contributor.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close