In current times, contributors of the general public have expressed deep situation approximately retirement plans and the way useful it's far to the common Ghanaian. With all its benefits, retirement plans are of low patronage in Ghana, as defined in advance in Part 1 of No Financial Retirement Plan-A Casting Shadow in Ghana.
Details Estimates % Share
Total Number of Estimated employees in Ghana 16,000,000 100%
Estimated quantity of human beings contributing closer to retirement-SSNIT 1,600,000 11%
Estimated quantity of human beings NOT contributing 14,400,000 89%
Breakdown of Contributors Estimates % Share
Estimated quantity of human beings contributing closer to retirement-SSNIT 1,600,000 100%
The estimated quantity of self-hired human beings contributes 14,000 1%
Estimated no. of Employees (hired via way of means of human beings) contributing 1,586,000 99%
https://www.ssnit.org.gh/news/ssnit-holds-stakeholder-meetings-to-expand-coverage-of-the-scheme/#:~:text=Presently, a touch over 14,000, to the SSNIT Pension Scheme
We study maximum not unusual place retirement plan schemes in Ghana. These are the Traditional Pension Scheme and the Defined Contribution Scheme.
Traditional pensions
Since redefining the pension scheme in Ghana in 2009, conventional pensions will encompass Tier 1 and Tier 2 schemes.
A conventional pension in Ghana is what maximum human beings confer with as “SSNIT”, but the right call is the Tier 1 (Social Security Scheme) that is administered or controlled via way of means of the Social Security and National Insurance Trust (SSNIT).
Another is the Tier 2 (Mandatory Occupational Scheme) which is controlled via way of means of any accredited personal organization like Old Mutual Ghana, United Pension Trust etc.
Tier 1 and Tier 2 schemes are perfect to manipulate because so little is needed of the worker. The schemes are obligatory and legally binding for each business enterprise to contribute on behalf of its employees. The schemes are completely funded via way of means of employers and offer a hard and fast month-to-month advantage to employees at retirement. Employer contributes 13% from an employee’s primary salary, and the employee contributes 5.5% from his or her primary salary, making a complete of 18.5%.
With this 18.5%, the business enterprise remits 13.5% to SSNIT for Tier 1 and 5% is mandated for Tier 2.
A character will want to have interaction with his or her business enterprise to affirm whether or not those contributions are being made or not. Contributions may be shown from SSNIT. If no contributions had been made, you should insist on it to be carried out right now or have interaction with SSNIT to help put into effect those contributions. It is obligatory and should be enforced.
If you are self-hired, you'll want to get an SSNIT quantity or ideally own a Ghana Card (Ecowas Identity Card); then you could have interaction SSNIT at the important strategies to begin contributing.
Defined Contribution plans
Unlike the conventional pension, which is obligatory, the described contributions aren't obligatory a result making it uncommon. An example is the Tier three fund, popularly called the Provident Fund which is the maximum practised described contribution plan in Ghana. It is a voluntary completely funded and privately controlled provident fund and private pension plan.
As the call implies, described contributions may also be available in many paperwork relying on the threat urge for food and funding alternatives of a character. A character may also determine to make investments over a time frame beginning with a lump sum and periodic contributions or simply make periodic contributions without always beginning with a lump sum. It may also take numerous paperwork and those budgets are competitively controlled to yield nice results.
For a few described contribution plans, an business enterprise may also help a worker withinside the contribution via way of means of contributing 1/2 of or a double of what a worker may also contribute to the scheme. This is at the discretion of the business enterprise (thus, it isn't always a duty of the business enterprise to do so). Where such an advantage is lacking, a worker is then left with the choice to completely fund this scheme. Entities administering such scheme encompass Old Mutual Ghana, United Pension Trust, etc.
Both the conventional and described contribution plans are tax-advantaged plans that give a manner to keep for retirement. They permit those contributions to develop exponentially at tax-loose till they're withdrawn at retirement.
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