Overview
The National Pensions Act 2008 (Act 766) established a contributory three tier Pension Scheme. In 2012, the Health Sector Unions and Associations set up the Health Sector Occupational Pension Scheme and is one of four public sector schemes currently in operation.
The Health Sector Occupational Pension Scheme has been structured to conform to requirements of the National Pensions Act, 2008 (Act 766). This will enable members to enjoy the tax reliefs and other benefits provided under the Pensions Act 766.
The scheme therefore covers all health sector staff in Ghana Health Service, Teaching Hospitals, CHAG Member Institutions, Ahmadiya Muslim Mission Hospitals, Baptist Medical Centre, Health Sector Regulatory Institutions, the health professions regulatory bodies, St. John's Ambulance Service, Members of the four major Unions and Associations within the health sector, that is Ghana Registered Nurses and Midwives Association, Ghana Medical Association, Health Services Workers Union, Government Hospital Pharmacists Association and their allies as well as all employees of HSWU and GRNMA.
The Scheme is a defined contribution (DC) pension scheme, that is, a pension scheme in which the retirement benefit paid to each member depends on the amount of total contributions and the investment returns earned on those contributions.
The current Board of trustees was inaugurated in January, 2018, with representatives from Ministry of health Ministry of Finance, Ghana Health Service, Attorney General's Department and representatives of the four main health sector unions.
Service Providers
History of the 3 Tier Pension Scheme
Concerns raised and agitations made by public servants over inadequacies of the level of pensions to sustain a respectable lifeMembers of the 1st Board were:for retired public servants especially the low pensions received by workers under the Social Security and National InsuranceTrust (SSNIT) Pension Scheme introduced in 1972 compared to those under Chapter 30 of the 1950 British Colonial Ordinances(Pension Ordinance No. 42), popularly known as CAP 30, led to the initiation of processes to reform pensions in Ghana.In addition, pension schemes that operated in the country at the time also failed to consider the plight of workers in the informal sector who constitute about 80% of the working population in Ghana.The concern rose to a peak in agitation and protests by workers' organisations for the restoration of public service pensions to the level of CAP 30 to replace the SSNIT system that had been 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 which reported its findings to the Government in March, 2006. Following consideration of that report, the Government issued a White Paper in July 2006, which accepted almost all of the Commission's recommendations.
The Committee commenced work in November, 2006 and as part of its Mandate submitted proposals for National PensionReform Bill to Government in 2007. Cabinet approved the Bill and submitted it to Parliament for passage into law. The Bill was passed by Parliament and received Presidential assent in December 2008. A new Pensions Law, the National Pensions Act, 2008(Act 766) was promulgated on 12th December, 2008 and mandated the establishment of a new contributory Three-Tier PensionScheme with the National Pensions Regulatory Authority (NPRA) to oversee the efficient administration of the composite pension scheme.
Act 883 amends some of the major provisions under the First Tier Scheme of the National Pensions Act, 2008 (Act 766) such as the age limit exemption, payment of emigration benefits to non- Ghanaians, the computation of pension rights and other related matters.
Overview of the 3-TIER Scheme
How the Second Tier Scheme Is Funded
Benefits of the Second Tier Scheme
1. Members will be entitled to receive a Lump Sum payment of all benefits accrued under the scheme on the grounds of;
2. Investment income is tax exempt
3. Monthly contributions are tax exempt
4. Ensures retirement income security
Following the launch of the new 3 Tier Pension Scheme, it was expected that employers in the public and private sectors would make efforts to institute 2nd Tier Schemes for their employees. However, many employers did not even understand the concept of the new Pension Scheme.
Organized Labour with the support of Friedrich Ebert-Stiftung foundation organized a workshop for Union leaders at Ho in 2012 where the teething Ghana Education Service (GES) Pension Scheme and Mines Scheme were presented as case studies.
Within the course of the two-day workshop, representatives of Ghana Registered Nurses and Midwives Association (GRNMA) and Health Services Workers Union (HSWU) present agreed to work together to form a common 2nd Tier Pension Scheme for their members.
This led to the formation of a Working Group which worked with a consultant by name Mr. Adu Mensah, an Actuary who guided the team to lay the necessary foundation for the establishment of the HSOPS.
