TMS25: Pensions Must Benefit Retirees and the Economy, Says NPRA CEO
By Kingsley Webora TANKEH
The CEO of the National Pensions Regulatory Authority, Christopher Boadi-Mensah, has urged fund managers to broaden their investment portfolios as a means to minimize risk and enhance returns for the sake of national progress.
"The proper administration of pension funds doesn’t just shape the well-being of our retired citizens; it also acts as long-term funding that can be directed towards infrastructure, housing, renewable energy initiatives, and development projects," he stated.
"These investments offer both reliable inflation protection and the potential to generate employment as well as enhance efficiency," he highlighted.
As governments and numerous developing nations face changing population dynamics, increasing longevity, and a growing unofficial economy, the dialogue about investment strategies and pension management has become more critical than ever before.
Given that an impressive 80 percent of Ghana’s labor force operates within the informal sector and remains unregulated — implying they are not part of any structured pension system — Mr. Boadi-Mensah is advocating for expanding coverage to include these workers.
He stated that refusing these diligent citizens, who substantially support the nation’s economy, any form of retirement security "is not merely a matter of public policy but also an issue of social equity."
At The Money Summit 2025 organized by the Business and Financial Times in Accra, the official announced that they have created a micro-pension regulatory framework tailored to meet the requirements and habits of informal sector employees. This initiative aims to increase inclusivity for pension funds within Ghana.
This structure supports contributions on a daily, weekly, or monthly basis and caters to both long-term and annuity-style retirement choices.
Even though the informal sector offers a significant chance for fund managers to attract capital for investment, he emphasized that incorporating it into the pension framework goes beyond mere figures. "It’s about respect," he stated, highlighting the urgency of taking action.
He mentioned that the authorities are collaborating with various parties to create reward systems aimed at informal sector employees. This involves designing matching-contribution bonuses and tax breaks to promote wider involvement.
To improve accessibility, NPRA is leveraging technology to develop a responsive and reliable dedicated digital platform – the Pension Digital Ecosystem – that will make onboarding and benefit access seamless.
“By integrating it with mobile money platforms and the GhanaCard, contributions will receive real-time updates on their account,” he added.
This level of transparency, according to him, is essential to broadening trust in pension funds… which is the bedrock for long-term commitment.
“Pension funds represent the hard-earned savings of workers across the country,” he noted.
By June 2024, the total amount of pension funds under management reached GH¢78.2 billion. According to data from the PensionsDigest, approximately 78.34% of these assets were invested in government securities issued by theGovernmentof Ghana, such asTreasurybills and bonds.
Weighing-in on the issue of pension investments diversification, Mr. Boadi-Mensah stressed a need to\xa0 control their exposure to government securities and bonds that carry hidden risks.
After the extraordinary 2022 Domestic Debt Exchange Program, DDEP—which resulted in an estimated loss of GH₵61.7 billion from anticipated interest payments and prolonged maturity periods—there have been demands for alternative solutions.
However, industry professionals are calling for a clear and practical structure that guarantees transparency so as to safeguard the investments of these susceptible pensioners and make them accessible whenever required.
The central theme for The Money Summit 2025 – ‘Optimising investment and pensions management: Strategies for sustainable retirement income and economic growth’ — highlights the urgent requirement for comprehensive long-term financial planning, especially during a period where economic instability could potentially deplete investors' resources.
More intriguingly, the regulatory landscape has become somewhat more lenient. In 2023, the National Pensions Regulatory Authority (NPRA) increased the cap for alternative investments to 25 percent, only one year following the well-known DDEP incident.
Nevertheless, this appears insufficient according to industry professionals, given the excessive focus on government securities and bonds.
"We have to acknowledge that the conventional investment fund, which is predominantly comprised of government securities, has reached its peak. Meanwhile, savings like instrumental funds offer minimal returns, particularly during times characterized by inflation, market fluctuations, and economic instability at the smaller scale," he stated.
By their very nature, pension funds have a long-term orientation. Beyond conventional investment categories such as equities, fixed income securities, and trading revenues, these funds can also be directed towards infrastructure projects, property development, debt restructuring, venture capital, sustainable power solutions, water management systems, railway networks, telecommunications infrastructure, agricultural business ventures, and affordable residential accommodations.
The diversification of pension fund investments offers chances to effectively handle long-term risks, simultaneously ensuring that pension funds support national growth objectives.
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