Ghana: IMANI tasks Minister-Designates in Open Letter


January 21, 2013


Hon. Seth Tekper & Hon. Nii Armah Ashietey


Ministry  of Finance and Economic Planning

Ministry of Employment and Labour Relations.


Dear  Honourable Ministers-Designate,


                                                                                Open Letter: Save Workers Pensions


Congratulations on your nominations by the President.   I have no doubt you will be Ministers after the parliamentary vetting.


As you may recall, there has been great turbulence on the pension front in the wake of revelations that the National Pension Regulatory Authority has been overly dormant in speeding up the new pension reforms four years after they were enacted. What is even egregious is the festering perception that they may have been financial sins unknowingly committed by the NPRA in its management of the second tier contributions. Sadly, the NPRA has  been unable to convince the Ghanaian public that there must be faith in its operations. 

Recent provisional statements released by the NPRA to individual contributors into the Temporary Pension Fund Account (TPFA), shows that returns on investment (ROI) for workers contributions made from January 2010 to June 2011 is less 2.8% per annum. This of course is startling, given that the NPRA said it would invest worker’s funds at the T-Bill rate. Over the period stated, the average 91-Day T-Bill rate was about 15% per annum. These serious disparities have yet to be addressed by the NPRA in any way.


It would appear that  the Ministry of Finance and Economic Planning(MOFEP) has not had a full grasp of the troubling Pensions reforms, as it has single handedly decided without due regard to the minimum courtesy to the newly licensed corporate trustees asked a relatively unknown private trustee to handle all second tier contributions of government workers.  


The attached letter from the Ministry of Finance and Economic Planning has been brought to our attention and we are concerned that there may have been a grave error in assigning a Private Corporate Trustee the singular role of undertaking government business.  

In the MOFEP Letter to Pension Alliance, the private corporate trustee so chosen, there is suggestion that rules of competitive bidding were applied as it partly states “competitive selection process". It is increasingly clear after speaking to all the major corporate trustees that there was no such process, which to them demands a public announcement and petition for tenders as MOFEP is public entity. 


The following points explain the issue in detail.


1. The Civil and Local Government Staff Associations, Ghana has strongly opposed Government's selection of Pension Alliance Trust Ltd to run the Tier 2 pension schemes of all workers on government payroll. Pension Alliance Trust Limited is a private company owned by private individuals. 

2. The Civil and Local Government Staff Associations, Ghana (CLOGSAG) issued a statement on Thursday 22nd of November 2012 and copied the Ghana News Agency (GNA) about its dismay for the action taken by government. In its statement CLOGSAG stated that “Our initial observation is that this action by the Minister of Finance and Economic Planning, appointing a Trustee for Civil and Local Government staff, without taking cognizance of the fact that CLOGSAG has registered Hedge Pensions Trust, to manage its own pensions is unilateral and an imposition that is not backed by the tenets of the National Pensions Act 2008, Act 766 and the Labour Law.” 

3. The statement continued that “Mortgaging pension contributions of staff of Civil and Local Government Services to a private Trustee for five years is contrary to the intent and purpose of the National Pensions Act 2008, Act 766, as it violates the portability principle of the new pension scheme. Could this not be an avenue for the payment of judgment debt should the five -year contract be terminated?”

From the above, a few questions need to be answered.

i. Who is this company called Pension Alliance Trust Ltd.? 
ii. How did Pensions Alliance Limited get the business of government without any public advertisement and invitation for bids from other Corporate Trustees? 
iii. Who are the shareholders/directors of this Pension Alliance Trust Limited 
iv. Is it true that the Pension Alliance Trust Limited belongs to some important members of the former ruling government and so they could get a big contract like this without public bidding? 
v. What is the relationship between owners of Pension Alliance Trust Ltd and the current Board of the NPRA?


 Honourable Ministers, it seems to me that the Ghanaian worker has been tired with state-owned Social Security and National Insurance Trust  (SSNIT).  SSNIT has been what it has been because it does not have a competitor.


Nobody needs another SSNIT running Tier 2 schemes for workers on government payroll. The decision to let Pension Alliance Trust Ltd run Tier 2 pensions for workers on government payroll should not be allowed to stand.

Please open the bid and let all 15 licensed Corporate Trustee companies bid to the ministries, departments and agencies so that for once, workers can own their pensions. It is their future. They deserve its ownership.  I have attached the two letters for your attention.

Thank you for your attention.


Earnestly submitted,



Franklin Cudjoe

Founding President, IMANI

IMANI takes the bull by the horn with the new Ghana cabinet on pensions