An Akan proverb says, ‘if you keep an eye on the meal, you would get your share’.  These were the times when the children in the neighbourhood and siblings used to regularly share a common meal from the same plate.  Your ‘survival’ depended on your active participation in the meal.  This is so with retirement planning and anywhere else your treasure is.  We are required to take care of our funds by showing interest in it and monitoring your pension funds for its performance.   

Our Responsibility

‘Keep your eyes on the road’ has been adapted for the monitoring of your pension funds and investments.  Developments in pension policy globally have shifted the responsibility of old age income provision to individuals.  Thus, it is our responsibility to ensure that our retirement funds are adequate to take care of us.  One action that makes this achievable is our personal interest in our funds.  It is a fact that many of us don’t check our bank statements to reconcile our transactions and especially charges.  The same attitude is extended to our investments. When we look at our payslips, we go straight for the jugular, ‘net salary’, with less attention on deductions. 

The different types of pension plans require different monitoring approaches.  The 3-tier scheme comprising the 1^st, 2^nd & 3^rd tiers should be monitored by contributors.  It is firstly the responsibility of the contributor.  It is your money! Your other investments also require monitoring.  Considering the fact that you are accumulating funds for a longer spread of time, anything can happen within the time.  Therefore, keep monitoring your funds.

1st Tier

The employer is expected to pay 13% of your basic salary as a statutory contribution.  You should, therefore, monitor those contributions paid by past employers and being paid by current employers.  Check that the correct amounts have been paid (in past employments) and are being paid (for current employments).  Some organisations are highly formalized and may not have problems of non-payments.  However, human and system errors could cost you.  Other organisations are also not consistent with payments.  Both cases require active monitoring of your pension funds.  Look for adjustments in contributions where salaries have been adjusted through promotions and other payroll developments. 

Further Checks – 1^st Tier

Since this contribution does not come out of your salary, it may not necessarily appear on your payslip.  You’re therefore likely to lose sight of it.  SSNIT in recent times has encouraged contributors to keep checking their records.  The biometric registration is a good entry point to take charge of your account.

Other things to look out for are name and status changes along your work life, which may not have been updated.  It is much easier if the contributor has only worked at one place their whole life.  If not, every contributor should keep track of all their previous work engagements and the related pension contributions. 

2^nd & 3^rd Tiers

These schemes return benefits generated from levels of contributions and the investment returns.  Late payments of contribution greatly affect the rate of growth of the funds due to loss of potential returns.  When funds are not invested on time, you lose all the possible returns that you could have earned on your contributions.  We should be interested in looking at their statements to see how the funds are doing.  Employers are expected to deduct 5% of your basic salary and remit to the trustee.  We should check dates when  contributions were remitted as compared to our salary dates.  Recently, one of my clients switched her pension from one Mastertrust scheme to another when she realized she wasn’t getting enough good service from her current trustees. 

As contributors, we should know our trustees and ask them questions.  We should also be interested in work place forums or other sessions where these are discussed.  There are a lot more one could look out for in ‘keeping their eyes on the road’ which could not be exhausted in this article.

Scheme Information and Statements

Trustees are required by law to provide scheme information to contributors.  The pension law, ACT 766, Sections 57,105,116, require trustees to make contribution statements available to members on annual basis.  Most trustees however now have online platforms where one can log on and view their statements and status of their funds.  Statements may be updated monthly/quarterly.  It is your responsibility to go on the portals and check the status of your fund and its growth.  That is how you keep up with monitoring your pension funds.

Overall be interested in the accuracy of all your biodata on the system.  Ghana is gradually moving towards organizing our national data but until the data system becomes top-notch which could still take decades, each one has to take responsibility.  Data loss is one risk that could rob a contributor of their deserved accumulated funds.  This comes from the fact that you are accumulating funds over decades to take care of your future needs.  The rather long time is a recipe for migration risks where operational errors, investment risks, disruptive events and other factors could affect your pension fund account. 

Amending Your Details

Updating of benefit nominees is always a thorn in the flesh of pension trustees globally.  You should be aware that in the event of unexpected deaths, your funds could end up with unintended persons.  It situation has the tendency to set off legal battles.  As circumstances of life changed there could likely have been the need to re-nominate new persons to be the beneficiaries of your funds should death set in.  A typical example is where one nominated their siblings to receive their pension benefit upon death, but after marriage may now nominate their spouse.  Dutifully amend your details using opportunities made available. 

This article may not exhaust the entire range of associated risks, however the very basic step is for you to keep your eyes on the road, and keep monitoring your pension funds.  

 “An investment in knowledge pays the best interest”, Benjamin Franklyn

Yaw is a Pensions and Management Consultant with M-DoZ Consulting and an Executive Director of M-DoZ Retirement & Investment Club. M-DoZ runs retirement & investment planning sessions for companies, churches, trade associations, groups, e.t.c. The club runs financial advisory clinics and helps its members to plan for retirement.   Joining the club is free.  Call now on 0201196080 and book a retirement planning session for your staff/group.      korankyaw2@gmail.com; follow on facebook and twitter.