Research shows that 88% Of Ghanaian workers are without pensions; women worse hit

A fiscal policy think tank, the Institute for Fiscal Studies (IFS), has revealed that over 80% of working Ghanaians do not have any sustained income upon retirement.

Ghanaian market women

The think tank bemoaned the low numbers of people covered by pensions in the country.

A research conducted by IFS indicated that the issue of low pensions coverage is more pronounced with women than with men.

Using data from the National Pensions and Regulatory Authority (NPRA) and the Social Security and National Insurance Trust (SSNIT), a Research Fellow at the institute, Leslie Dwight Mensah said of the 12 million working population, only 12.3% were currently covered by pensions.

“This implies that the other 88% are uncovered and these will mostly be people who work in the informal sector.”

The data used for the presentation terminated in 2013, which Mr Mensah said was the latest reliable data available to the institute.

Mr Mensah said that while all workers in the public sector were covered by pensions, those in the private sector were hardly covered because most of them were in informal work.

He said pension coverage in the private sector was 6.8% as of 2013, revealing “the problem of high informality in the labour market” in the country.

He said the data further showed that persons living in the southern part of the country – the 11 regions down south were three times likely to receive pensions than those living in the northern part.

This, he said, also reflected “the fact that people working in the north tend to be involved in informal types of work than formal types of work and so when they reach 60 years and above, they are less likely to receive pension.”

On gender distribution, Mr Mensah said men in work were more than twice likely to be covered by a pension scheme than their female counterparts.

He said in 2013, while 17.1% of men in work were covered by pension, only 7.8% of females were covered.

“This reflects the fact that generally women turn towards informal employment than men and because the pension system finds it harder to reach the informal sector, it is less able to capture them,” he said.

On coverage of the retirement population, Mr Mensah said the data showed that of the 1.9 million people aged 60 and above in the country, only 14% of them were receiving pensions as of 2018.

“The remainder will be those who have to continue to break their backs to earn an income, depend on families or on the Livelihood Empowerment Against Poverty (LEAP) transfers,” he said.

Due to this the institute has, therefore, called for innovative ways to help expand coverage to more Ghanaians to help cushion the retired populace.

Currently, the National Pensions Act (Amendment), (2014) Act 833, makes it compulsory for all public sector workers to contribute to a pension scheme either under the SSNIT or one of the non-contributory schemes operated by the Ghana Audit Service and the Ghana Armed Forces among other state agencies.


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