Social Security and Pension

All about Social Security and Pension, Social Security and Pension and Salaries, Pension and Work and Benefits, What Happens When I Retire? and more on Mywage Ghana

How do Pensions and Social Security work in Ghana?

The National Pensions Act, 2008 in Ghana establishes a contributory three-tier pension scheme consisting of the following:

  • A mandatory basic national social security scheme
  • A mandatory fully funded and privately managed occupational pension scheme
  • A voluntary fully funded and privately managed provident fund and personal pension scheme

The basic national social scheme operates under the Social Security and National Insurance Trust. The occupational pension scheme, provident fund scheme, personal pension scheme and other privately managed pension schemes are managed by trustees approved by the board.

The objective of the scheme is:

  • To provide pension benefits to ensure retirement income security for workers
  • To ensure that every worker receives retirement and related benefits as and when due
  • To establish a uniform set of rules, regulations and standards for the administration and payment of retirement and related benefits for workers in the public and the private sector.

What is the contribution of a worker to the social security scheme?

A worker’s contribution to the social security scheme is five and half per cent (5.5%). The employer of an establishment is expected to deduct from the salary of every worker in the establishment immediately at the end of the month, a worker’s contribution for the period, irrespective of whether or not the salary is actually paid to the worker.

What is the statutory age for a worker to join the social security scheme?

The minimum age at which a person may join the social security scheme is fifteen years and the maximum age is forty-five years.

What shall be the benefit of a worker who has retired and has contributed to the scheme?

A worker of the social security scheme who retires on attaining the compulsory retirement age of sixty years (fifty-five years if in hazardous employment such as mining) or retires voluntarily on attaining the age of fifty-five years and has contributed to the social security fund for a period of not less than fifteen years or one hundred and eighty months is entitled to a superannuation pension.

What happens if a worker has contributed less than fifteen years to the scheme before retirement?

When a worker has made less than fifteen years contribution to the social security scheme fund before the worker retires either compulsorily or voluntarily, the member is entitled to:

  • A lump sum of money equal to the members contribution as benefit
  • An interest of seventy-five per cent at the prevailing government treasury bill rate on the lump sum.

What happens when a worker who has contributed to the scheme dies?

Where a worker who is part of the social security scheme dies, a lump sum benefit is payable to the deceased’s family who are dependants of the deceased and have been validly nominated as beneficiaries of the deceased

What happens if a deceased worker fails to nominate next of kin?

Where no nomination is made or the nomination is found to be invalid by the trust, the lump sum shall be distributed to the dependant. Where a deceased member fails to nominate a surviving spouse and children as beneficiaries, the spouse and the children may apply to the court for a variation of the nomination to include them.

What conditions qualify a worker for pension entitlement?

A worker is qualified for a pension when he or she satisfies the following conditions:

  • A minimum contribution period of not less than one hundred and eighty months
  • Has attained the age of sixty years, or fifty-five years in the case of an underground mine worker or a worker who has opted for voluntary retirement with reduced pension and filed an application for superannuation.

How is pension entitlement computed?

The minimum pension payment is based on fifty per cent (50%) of the average annual salary for the three best years of a members working life. Where a worker works beyond the minimum contribution period, the amount of pension payable is increased by one and half per cent for every additional twelve months worked up to a maximum of eighty per cent.

Read more

Find out more about Minimum Wages in Ghana. And take our Salary Survey.

The basic national social scheme operates under the Social Security and National Insurance Trust. The occupational pension scheme, provident fund scheme, personal pension scheme and other privately managed pension schemes are managed by trustees approved by the board.

What is the contribution of a worker to the social security scheme?

What happens if a worker has contributed less than fifteen years to the scheme before retirement?

When a worker has made less than fifteen years contribution to the social security scheme fund before the worker retires either compulsorily or voluntarily, the member is entitled to:

What happens when a worker who has contributed to the scheme dies?

Where a worker who is part of the social security scheme dies, a lump sum benefit is payable to the deceased’s family who are dependants of the deceased and have been validly nominated as beneficiaries of the deceased

What happens if a deceased worker fails to nominate next of kin?

Where no nomination is made or the nomination is found to be invalid by the trust, the lump sum shall be distributed to the dependant. Where a deceased member fails to nominate a surviving spouse and children as beneficiaries, the spouse and the children may apply to the court for a variation of the nomination to include them.

What conditions qualify a worker for pension entitlement?

A worker is qualified for a pension when he or she satisfies the following conditions:

How is pension entitlement computed?

The minimum pension payment is based on fifty per cent (50%) of the average annual salary for the three best years of a members working life. Where a worker works beyond the minimum contribution period, the amount of pension payable is increased by one and half per cent for every additional twelve months worked up to a maximum of eighty per cent.

Read more

Find out more about Minimum Wages in Ghana. And take our Salary Survey.

loading...