A new pensions law which will cater for the creation of a new contributory three-tier pension system to replace the existing parallel pension schemes is expected to come into force by the end of March this year. The proposed three-tier scheme consists of a mandatory basic national social security scheme responsible for monthly pensions only. The second scheme is a mandatory, privately managed occupational or work based scheme to pay lump sums, while the third is a voluntary provident fund and personal pension scheme which can cater for between 80 and 85 per cent of Ghanaian workers in the informal sector and others who want to contribute, in addition to the first two schemes. Ghana is currently operating two major public pension schemes, which are the Pensions Ordinance No. 40 (CAP 30) of 1950 and the Social Security Act (PNDC Law 247) of 1991. Speaking to the Daily Graphic in Accra, the Project Consultant of the Pension Reform Implementation Committee, Mr Daniel Aidoo Mensah, said the National Pension Reform Bill, which could not be passed by the end of 2007, as had been expected, was before Cabinet, awaiting parliamentary deliberations and approval. This is in accordance with the recommendations made by a nine-member Presidential Commission on Pensions led by Mr T.A. Bediako, a retired educationist. The commission, which was appointed by President J.A. Kufuor in July 2004, submitted its final report in March 2006 and its recommendations were approved by a government White Paper issued in July 2006. In October 2006, the President again appointed a Pension Reform Implementation Committee, also headed by Mr Bediako, to implement the recommendations made by the Presidential Commission on Pensions. The committee came out with the National Pension Reform Bill in 2007. Touching on the bill, Mr Mensah said it catered for the establishment of an independent National Pensions Regulatory Authority to regulate, supervise and monitor both public and private pension schemes. He said the authority would also advise the government on overall pension matters in Ghana and approve, regulate, supervise and monitor trustees, pension fund managers, custodians and other institutions relating to pension matters. He said there were provisions under the bill for all workers currently on the Social Security and National Insurance Trust (SSNIT) and who were below 55 years to automatically join the new scheme. He explained that a committee would be set up to review the case of contributors who were above 55 years. Mr Mensah pointed out that the new scheme would be an improvement on the existing Social Security and National Insurance Trust (SSNIT) scheme, as well as the CAP 30. He pointed out that as part of its functions, the committee was currently assisting in the restructuring of SSNIT for it to fit into the new pension scheme to focus on its responsibility of managing the first tier, which involved the basic national social security scheme m.andatory for all formal sector workers. The restructuring of SSNIT, Mr Mensah noted would involve an overhaul of the governance, management and, administrative structure of the trust and also a review of the law governing it. "The new SSNIT will have a board of trustees, instead of a board of directors," he stated. . . Making a point to support his assertion that the proposed scheme would be better than the existing ones, Mr Mensah said the period for one to qualify for pension under the new scheme would be reduced from 20 to 15 contributing years and survivors’ benefit period increased from 12 to 15 years. Under the second-tier, which involved occupational pension scheme, the project consultant said it might allow assignment for a mortgage for a member to acquire a primary residence, adding that when approved, one could use his or her contribution for a mortgage. On the third-tier, Mr Mensah explained that it provided for individuals within the private sector and public sector workers who wanted to make voluntary contributions to enhance their pension benefits beyond the mandatory second-tier scheme and any provident fund scheme sponsored by their employers. He said recommendations had been made to phase out the CAP 30 scheme which was not sustainable, and for that matter there would be no new entrants. He further explained that the bill had made transitional arrangements to enable the Controller and Accountant-General’s Department to continue to pay CAP 30 beneficiaries their benefits, while it lasted, and pointed out that there was an option for public servants presently under that scheme to join the new scheme. Programmes which the committee has lined up for 2008 include public education and training on the new pension law, facilitating the implementation of the new law, particularly the second and third-tier privately-managed schemes and special orientation for ministries, departments and agencies (MDAs) and other statutory bodies on their role in the pension reform. Others include the establishment of administrative structures of the National Pensions Regulatory Authority, the completion of the restructuring of the CAP 30 scheme, continuation of the supervision of the restructuring of SSNIT, among other activities.