The new National Pension Scheme was instituted by the National Pensions Act, Act 766 which ensures that every Ghanaian worker receives retirement benefits as and when due.

The Act 766 which was passed on December 12th, 2008 mandated the establishment of a new contributory Three-Tier Pension Scheme with the National Pensions Regulatory Authority (NPRA) to oversee the efficient administration of the composite pension scheme

The New Pension Scheme was launched on 16th September, 2009 and its implementation started in January 2010.

• To provide pension benefits to ensure retirement income security for workers.
• To ensure that every worker receives retirement benefit as and when due.
• To establish a uniform set of rules and standards for the administration, payment of retirement and related benefits for workers.

The First Tier is the Basic National Social Security Scheme for all workers in Ghana.  It is a defined benefit scheme and mandatory for workers to have 13.5% contributions made on their behalf.  The contribution is managed by SSNIT.

The Second Tier is a defined contributory Occupational Pension Scheme mandatory for workers with 5% contribution made on behalf of members.  The contribution is managed privately by approved Trustees.

The Third Tier which includes all Provident Funds and all other Pension Funds outside Tiers I and II is a voluntary scheme.

Worker – 5.5% of workers’ basic salary
Employer – 13% workers’ basic salary
Total – 18.5% of workers’ basic salary

1. • • Out of the 18.5%, employer remits 13.5% to SSNIT within 14 days following the end of the month to the mandatory First-Tier Basic Social Security Scheme.
     • Again out of the 13.5% paid to SSNIT, 2.5% is sent to the NHIA for the member’s health insurance.
     • The residual 5% is sent to the mandatory Second Tier Occupational Scheme which will be privately managed by Trustees approved and licensed by the Board of NPRA.

The 3 –Tier scheme covers all workers in both the private and public sector.  It is optional for the self-employed.

Additional Groups

• Cap 30
• Teachers’ Pension Ordinance
• Superannuation of Ghana Universities Staff
• Ghana Police
• Immigration Service Persons
• Prisons Service
• National Fire Service

• Officers and men of the Ghana Armed Forces
• Categories of persons exempted by the 1992 Constitution. e.g. Electoral Commissioner, CHRAJ Commissioner, Chief Justice, etc.

1. It is a 3-tier scheme.
2. The first two are mandatory for all workers.
3. The Third-Tier is a voluntary, fully-funded by members and a privately managed provident fund and personal pension scheme.
4. SSNIT pays only the monthly pension of the beneficiary and the Fund Managers who manage the Second Tier with the 5% contribution rates will pay the lump sum.
5. The Act is for both the public and private sector workers.
6. Minimum contribution rate – 18.5% of the approved monthly minimum wage (13.5% – SSNIT 1st Tier; 5% – 2nd Tier).
7. Maximum Contribution – a maximum amount will be determined by SSNIT in consultation with the NPRA periodically. Currently, the maximum contribution is on a salary of GH¢25,000.00.
8. Minimum contribution period is 180 months in aggregate or 15 years.
9. Entry age/Maximum Age – New minimum age is 15 years and the maximum age for a new entrant is 45 years.
10. Age Exemption – those who were 55 years and above before the commencement of Act 766 were exempted from this new scheme. On the other hand, a person who is 55 years and above exempted from the Act may opt to join the scheme.
11. The new scheme includes almost all the various pensions systems in the country.

There are four (4) types of benefit under the SSNIT scheme that members can enjoy depending on which contingency has occurred.

• Superannuation Pension/ Old age Pension
• Invalidity Pension
• Survivor’s Lump sum.
• Emigration benefit

Under the Superannuation Pension we have Old Age Pension and Reduced Pension.
Old Age Pension
Full Pension

• Must be at least 60 years
• Must have made a minimum of 180 months (15 yrs) aggregate contributions.

Reduced Pension

• Must be 55 years and above, but below 60
• Must have made a minimum of 180 months (15 years) aggregate contributions.

Basis for Calculation

• Age
• Average of best 36 months’ salary (wages /earnings)
• Earned pension right (Contributions made)

Each year for the 1st 15 years of contribution is rated 2.5%.  The subsequent years attract a yearly rate of 1.125%.  The Pension right ranges from 37.5% – 60%.

Pension Right Table

Lump Sum Payment

The  lump sum payment now falls under the Second Tier.

To qualify for invalidity pension, the member must have contributed for 12 months in aggregate within the last 36 months preceding the incidence of the invalidity. He/ She must have also been certified by a Medical Board as being incapable of any normal gainful employment due to a permanent physical or mental disability.

The invalidity pension is paid monthly to such a person who has been confirmed and certified incapable of earning an income.

Qualifying Conditions

To qualify for invalidity pension:

• You must have made a minimum of 12 months in aggregate within the last 36 months with the date of termination of appointment due to your invalidity as the reference point.
• You must have been declared permanently invalid and incapable of any normal gainful employment:
• By a qualified and recognized medical officer and
• Certified by a Regional Medical Board on which a SSNIT Medical Officer is represented.

MEDICAL EXAMINATION

• Report to the nearest SSNIT Branch in person or through your representative with a Medical Report from a recognized Medical Practitioner certifying you are invalid.
• You will be required to appear before a Medical Board for examination where your invalidity is certified by the Medical Board.

Survivor’s Lump Sum
This is paid to dependants of members under the following:

1. When a member dies before retirement or
2. When a pensioner dies before age 75

Computation

1. Where a member dies having made at least twelve (12) months contribution within the last 36 months prior to his death, a lump sum payment of the earned pension of the deceased member for a period of 15 years will be paid. This is based on the present value discounted at the prevailing Treasury Bill rate or 10%. Whichever is lower however, will be paid to the member’s nominated dependants.
2. When the death of the member occurs before making the twelve (12) months contribution within the last 36 months a lump sum equal to his total contributions and interest at the rate of 75% of government Treasury bill rate, will be paid.

1. Every worker who has an employer-employee relationship must be registered with the Scheme.
2. Every worker should have only one (1) social security number.
3. Use same social security number for your whole working life.
4. The Social Security Number is not transferable.
5. Change your dependants regularly; at least once every five (5) years.
6. A member shall take steps to update or correct any missing or inaccurate information in the Statement of Account presented by SSNIT and support it with any relevant accurate document.

An employer is the owner of an establishment or the person who has the ultimate control over the affairs of an establishment and with whom the worker entered into a contract of service or apprenticeship and who is responsible for the payment of his salary.

1. Ensure all employees are registered under the Scheme.
2. Make regular contributions on behalf of the workers to SSNIT.
3. Deduct 5.5% of the workers salary every month and add 13% of worker’s basic salary to make 18.5%.
4. Out of the 18.5% the employer is to remit 13.5% to the Trust within 14 days of the ensuing month.
5. 2.5% of the 13.5% paid by employer to SSNIT shall be transferred by the Trust to the National Health Insurance Authority.
6. The employer shall accompany each contribution payment with a list of the workers indicating their social security numbers and the amount each worker is contributing – called the Contribution Report.
7. Contribution reports must be submitted by the end of the month whether contributions are remitted to the Trust or not.
8. Penalty of 3% per month shall be imposed on unpaid contribution.  Additional penalty of 3% per month on the contributions plus penalty may be imposed if after written demand notice the employer fails to pay.

No. The Act stipulates that minimum contributions must be made on the approved monthly minimum wage. The maximum contribution to the Trust shall not exceed 13.5% of a maximum amount to be determined by the Trust periodically in consultation with the NPRA.

Pension is a fixed sum paid regularly to a person, typically following retirement from service. It is a regular payment made during a person’s retirement from an investment fund to which that person or the employer has contributed.

Pension is a type of retirement plan, usually tax exempt, wherein an employer makes contributions toward a pool of funds set aside for employees’ future benefit. The pool of funds is then invested on the employees’ behalf, allowing an employee to receive benefits upon retirement or disability.

1. The National Pensions Regulatory Authority was established by Act 766 to regulate and monitor the operations of the three –tier scheme to ensure effective Administration.
2. It has the capacity to sue and be sued and has perpetual succession.
3. It also issues guidelines for investment of Pension Funds and ensures compliance with Act 766.
4. Register Occupational, Provident Funds and Personal Pension Schemes.
5. Set up standards, rules and guidelines for the management of Pension Funds.

A trust, in its simplest form, is an arrangement under which assets are held and looked after on behalf of others called beneficiaries. In other words, it is a legal arrangement distinct from the plan sponsor where the contributions for the assets are deposited with the Trustee.

A trustee is a person who holds and looks after pension assets for the benefit of members and their dependants. Although assets are held in the name of the trustees, they do not belong to them.

You can update the following:

1. Your beneficiary nominations.
2. Your name.
3. You can replace misplaced membership card (Smart Card).
4. Your employer/SSNIT can update your financial statement after vetting by SSNIT
5. You can update your postal address, telephone number and email.