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Over the years, concerns have been raised and agitations made by public servants over inadequacies of the level of pensions to sustain a respectable life for retired public servants. Of particular concern to most workers’ groups has been the low pensions received by workers under the Social Security and National Insurance Trust (SSNIT) Pension Scheme compared to those still under Chapter 30 of the 1950 British Colonial Ordinances (Pension Ordinance No. 42), popularly known as CAP 30.

In addition, pension schemes that have been operated in the country so far have, beside their limitations, also failed to consider the plight of workers in the informal sector, who constitute the bulk (about 85%) of the working population in Ghana.

The concern rose to a peak in agitation and protests by workers’ organizations for the restoration of public service pensions to the level of the provisions still available to some public officers under CAP 30, in place of the SSNIT system that had been introduced in 1972 as the mandatory and universal pension scheme for all employees.

In recognition of the need for reforms to ensure a universal pension scheme for all employees in the country, and to further address concerns of Ghanaian workers, the Government in July 2004 initiated a major reform of the Pension System in Ghana. The process started with the establishment of a Presidential Commission on Pensions under the chairmanship of Mr. T. A. Bediako.

The Bediako Commission was charged with the responsibility to examine existing pension arrangements and to make appropriate recommendations for a sustainable pension scheme(s) that would ensure retirement income security for Ghanaian workers, with special reference to the public sector.

The Commission submitted its Final Report in March 2006. The Government accepted almost all the recommendations of the Commission and issued a White Paper (W.P. No. 1/2006) in July, 2006.

The main recommendation of the Commission was the creation of a new contributory Three-Tier Pension System for Ghana, funded by direct contributions of employers and employees to, replace existing parallel pension schemes.

The new contributory three-tier pension scheme comprises two mandatory schemes and a voluntary scheme as follows:

  • a first tier mandatory basic national social security scheme which will incorporate an improved system of SSNIT benefits, mandatory for all employees in both the private and public sectors;
  • a second tier occupational (or work-based) pension scheme, mandatory for all employees but privately managed, and designed primarily to give contributors higher lump sum benefits than presently available under the CAP 30 and SSNIT pension scheme; and
  • a third tier voluntary provident fund and personal pension schemes, supported by tax benefit incentives to provide additional funds for workers who want to make voluntary contributions to enhance their pension benefits and also for workers in the informal sector.
  • It is important to underline that provision has been made in the 3rd-Tier voluntary Personal Pension Scheme to cater for the peculiar needs of workers in the informal sector of the economy which covers about 85% of the working population.

Other major accepted Recommendations in the White Paper included:

Establishment of a National Pensions Regulatory Authority to regulate both public and private pension schemes in the country; 
The CAP 30 Scheme is not sustainable and should be phased out; 
Decentralization of public sector pension management and a restructured administrative system for CAP 30, while it lasts; 
Restructuring of SSNIT which should include an overhaul of the governance, management and administrative structures 
Review of SSNIT Law 
Pension Coverage for the Informal Sector; 
Unification of Pension – The proposed Pensions Regulatory Authority should, within five years after coming into effect of the new pension scheme, achieve unification of all pension schemes in the country.


In Oct. 2006, the President appointed an 8 member Implementation Committee including; representatives of ministries of Finance, Public Sector, Employment and Attorney General and a Consultant, under the chai rmanship of Mr. T.A. Bediako, to implement the accepted recommendations.

As part of the Implementation Plan, the Committee established five (5) Sub-Committees based on strategic stakeholders interests and expertise to advise the Main Committee on specific areas in the Government White Paper.


The mandate of the Committee was to perform the following tasks:

- To implement the accepted recommendations of the Presidential Commission on Pension as contained in the Government White Paper No. W.P. No.1/2006 of July 2006.

- To facilitate the drafting of a new Pension Reform Bill that will give legal backing to all the accepted recommendations of the Presidential Commission on Pensions requiring the passage of laws. Etc


  •  During the Pension Commission’s work the major issue in the submissions and memoranda received from organized labour, pensioners and public servants was the inadequacy of pensions and gratuities; in particular the cash lump-sum paid under the SSNIT Scheme.
  • This constituted a major source of grievance for public sector employees and pensioners.
  • The Commission looked at the adequacy and fairness of existing pension benefits.

Income Replacement Ratio

  • Adequacy is normally measured as the ratio of an employee’s retirement income to the level of his or her earnings just prior to retirement.
  • The resultant “net income replacement ratio” is seldom 100%. This is because it is expected that income needs in retirement are usually lower than when one is in regular employment, as expenses incurred on commuting to work, cost of meals away from home and on office attire are normally excluded.
  • The global standard for income replacement ratio is about 67%.

The Ghanaian social-cultural and economic situation

  • The Commission took cognisance of the fact that in the Ghanaian circumstance, the needs of the individual rather increases on retirement as a result of the demands of our traditional norms and customs, i.e. family engagements, family leadership and other social responsibilities.
  • Additionally, in the absence of well-structured socio-economic systems, individuals on retirement needed a certain quantum of money to provide benefits which ordinarily should have been acquired during their working life, e.g. houses, vehicles, health insurance, etc.
  • The Commission considered that the peculiarities of our socio-cultural environmental demands make it necessary for the income replacement ratio to remain at a level which enables the retiree to meet the additional social responsibilities and concluded that any pension scheme for Ghana which ignores this social factor will fall short of pensioners’ expectations.
  • An income replacement ratio above 67% was therefore recommended for the Ghanaian circumstance.
  • NB: SSNIT Scheme replacement ratio for person aged 35 is 65%
  • Following the Commission’s in-depth analysis of the key issues and socio-cultural environment, it was concluded that existing pension schemes will not deliver benefits that will allow for adequate and sustainable income security.
  • To improve benefits and ensure retirement income security for Ghanaian workers, the Commission proposed a three-tier pension structure, comprising two mandatory schemes and a voluntary scheme.


A ten member Board of the National Pensions Regulatory Authority under the Chairmanship of Mr. Richard Kwame Asante, was inaugurated on 31st August, 2009.

The New Pension Scheme was launched by His Excellency, Prof. J.E.A. Mills on 16th September, 2009.

The implementation date for the new scheme was 1st January, 2010.



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Over the years, concerns have been raised and agitations made by public servants over inadequacies of the level of pensions to sustain a respectable life for retired public servants. Of particular concern to most workers’ groups has been the low pensions received by workers ... | Readmore