*Interfering NPRA looking for companies and people to punish
*Blaming “Orders from Above” for its punitive actions

Story: Atta Kwaku BOADI

All the world over, a lot of effort has gone into limiting the punitive powers of regulators in favour of business development and expansion. Most importantly, legislation and public pressure in advanced economies have pushed regulators to focus more on the safety of customer funds, customer service and the protection of customers. In this regard, training and development technical support to providers such as pension fund management and trustees.

Based on Today’s research, countries in the developed world have shunned the policeman/woman regulatory approach of using regulations for punitive or enforcement actions. But countries such as Ghana are still favouring state countrol and harsh interpretation of regulatory powers. The National Pensions Regulatory Authority (NPRA) over the past six years or so, is carving a reputation for itself as an enforcement activist regulator instead of being a development promoter. This, our research shows, runs counter to what motivated the objectives of the pension reform initiated by the Kufuor Administration and implemented by the Mills Administration.

The NPP John Agyekum Kufuor Administration fought to bring into being Pension Reform to break the monopoly of SSNIT and unleash the productive energies of the private sector. Unfortunately, those who don’t know or appreciate the history and how far the nation has come seem bent on seeing NPRA as just another public sector entity to wield authority and share the spoils of political power.

A case in point, when a hotel based in Tema (name withheld for now) wanted to move its funds from a well-known Pensions Trustee (name withheld for now) due to poor customer service and accounting, the NPRA blocked them. This and other such actions have led many wonder if the regulator has now taken on the role of decision making from customers and management instead of being an independent, objective and fair minded regulator.

The question still remains from our previous publication on this matter, why the NPRA is still insisting as of last week, that former Groupe Nduom employees cannot be paid the over GHC7 million Tier 3 pension money that has been made available by the GN Savings Receiver; this because it wants to transfer a Groupe Nduom Scheme that is inactive to a foreign-owned pension trustee. If the NPRA can do this to suffering former employees, what can’t they do to trustees, companies and their employees who may be considered not in the good books of the political party that put the directors and management of NPRA in office. When contacted, NPRA officials, claimed they were acting within their legal rights. The question is, in the harsh economic environment of today, why would any public official punish former employees who are entitled to their own pension money from being paid with money that is just sitting there because the regulator is fighting to flexing its muscles against a pension trustee?

The posture of not providing reports and information asked for by the Today newspaper is what makes us ask the question, are the people’s pension safe?

Today, it must be stated, has sent a formal, written request for information about the NPRA, the performance of the companies and Schemes it regulates and annual reports to aid our research, but management has not seen it fit so far to provide what is needed for an independent study. For example, we want to know who the major trustees, fund managers and custodians and their performance have been from 2016 to 2021. There have been allegations against the NPRA about bias, favouring some market players and running others down. The Today newspaper does not want to be engaged in propaganda. So we will continue to press for the information and formal reports to do our research objectively.

Observers are asking why members of the NPRA Board of Directors, the Ministers of Labour and Employment and Finance are looking on unconcerned. A well-known economist, who was involved in the early work leading to the enactment on the Pension Law in use now, has told Today, that the NPRA and its directors and management appear not to understand certain basics: that pension fund management is a long term investment activity that must be devoid of short term considerations; that pension funds being long term money has a potential power to boost long term business and economic development in the country; and that politics with is four year election cycle must must be allowed to interfere with such a long term life or death matter.

Also, Mr. Daniel Aidoo Mensah, a key player in the pension reform process stated in a speech in 2019:

“ While the main beneficiaries of the new pension scheme will be workers, as intended, the introduction of the scheme will also have a positive impact on the Ghanaian economy. A major contribution of the pension scheme is the availability of a pool of long-term funds for investments which will contribute immensely to national economic development.”

The present day directors and management of NPRA, don’t seem to know or appreciate the good works done by the Kufuor Administration (which incidentally included the current President Nana Akuffo-Addo and Dr. Papa Kwesi Nduom) and the struggles it took to bring about reforms in the pension arena.

According to Mr. Aidoo Mensah, “…there is no gainsaying the fact that the implementation of the new 3-tier pension system has faced a number of challenges, some of which are real and others created….including inadequate funding support and lack of needed seed fund for the NPRA for full implementation of the Pensions Act. This led to lack of a sustained public education about the virtues of the new pension system and also affected the recruitment of very experienced and well motivated technical staff.”

Also, “…on Joy FM’s supper morning show of 8th October 2012 to discuss problems with the implementation of the new pension scheme, Dr. T.A. Bediako, then a Board member of the NPRA admitted financial and administrative constraints are unduly affecting the implementation of the 3-Tier Pensions Scheme. He expressed among other concerns that:
“We don’t have enough money and we depend on gov’t of Ghana. The budget we presented this year, we had one- third of it. And we are supposed to receive money every month but from January till now, at my last count, we had only 3 remittances which are not enough and also not forthcoming” ( ref: myjoyonline.com news-2012-10-08).

Another major challenge has been the instability in the leadership of the NPRA – 6 CEO’s within 8 years with an average tenure of 16 months.
Adverse press reports on the work of the NPRA, leading to loss of public confidence and creating credibility problems. In fact, some large corporate institutions which transferred their existing PF to the 3rd Tier later withdrew their funds and in some cases shared the proceeds.

In addition, back in 2012, Graphic’s Charles Okine wrote:
“The NPRA set three deadlines for the licensing of the pension schemes of companies but have had to postpone it three times without concrete reason. The first deadline of April 30, 2012 was later changed to June, 2012 and subsequently to August 31, 2012. The August 31 deadline is past, without a single pension/provident fund scheme licensed. The situation is creating serious anxiety among the players in the industry”.

Today’s research into pension regulation in other countries, finds the following as food for thought to be considered by the Akufo-Addo Administration in taking a close look at what’s happening at the NPRA. The pensions regulator in the United Kingdom has this documented on their website: “ The Pensions Regulator (TPR) is the UK regulator of workplace pension schemes. We make sure that employers put their staff into a pension scheme and pay money into it. We also make sure that workplace pension schemes are run properly so that people can save safely for their later years.”

In the USA, The Employee Benefits Security Administration of the Department of Labor (ERISA) is responsible for administering and enforcing the provisions of Employee Retirement Income Security Act. ERISA covers most private sector pension plans. ERISA provides protections for participants and beneficiaries in employee benefit plans, such as access to plan information. Also, those individuals who use discretion in managing plans and controlling the plan’s assets must meet certain standards of conduct under the fiduciary responsibilities specified in the law.

In Part Three of the report on NPRA, we will trace the history of the Authority, how it came into being and the objectives that motivated the reform in the pension sector.

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