In line with Section 208(4) of the National Pensions Act, 2008 (Act 766), the National Pensions Regulatory Authority (NPRA), has through its Board reviewed the existing Guidelines on Investment of Pension Scheme Funds to realign pension funds’ investment to national goals and aspirations. The process to amend the existing Guidelines began with an inauguration of a thirteen member Working Group by the Board on 22nd June, 2016 to undertake the review of the existing guidelines to assess their continuing usefulness. The Working Group, made up of experts in the pension industry, submitted a list of recommendations following the review to the Board. The Board accepted most of the recommendations after consideration and accordingly amended the existing Guidelines to reflect the recommendations of the Working Group.
The new Guidelines, among others, are expected to create an environment that enables pension funds to impact positively on the Ghanaian economy. In line with this objective, the new Guidelines have given special attention to certain investment vehicles that have developmental focus and are in direct alignment with national aspirations. Key among these investment vehicles are those targeted at providing the desired financing for the cocoa sector and infrastructure development of the Ghanaian economy.
Also investment vehicles aimed at providing financing for Local Government and Statutory Agencies have been provided for in the new guidelines in anticipation of a Municipal Financing Act expected to be passed in the near future.
The new investment Guidelines have introduced alternative investment asset classes to complement traditional investment asset classes and this is to essentially increase the scope of pension investment for purposes of achieving a well-diversified portfolio. It is expected that these alternative investments are pre-approved by the NPRA prior to any investment by any scheme in addition to qualifying conditions spelt out by the new Guidelines.
Percentage allocation for all, except for Bank Securities and other Money Market Securities, were reviewed to realign them in the manner expected to achieve the prudential objectives of the guidelines.
The new Guidelines have since the 27th January, 2017 been gazetted and will be operational from 1st April, 2017.