SEVEN pension funds in the country will cease operations early next year after their merge into two entities.
Under the envisaged Public Service Social Security Fund Act, only two funds, the Public Service Social Security Fund (PSSSF) and the National Social Security Fund (NSSF), will be formed to cater for the public and private sectors, respectively.
The Bill for the Public Service Social Security Fund Act, scheduled for tabling in the coming parliamentary sitting, proposes the funds’ amalgamation. In the just ended parliamentary meeting, the document went through the first reading, and is now waiting for the second reading and passage of the Bill into law early next year.
Efforts to reach the Social Security Regulatory Authority (SSRA) Director General, Dr Irene Isaka, to comment on the new development failed yesterday. After endorsement by the National Assembly, the two funds will cater for the public and private sectors.
The proposed Act proposes the establishment of the fund, the Public Service Social Security Scheme, serving all employees in the public service sector, including all employees in other pension funds.
The monies of the former Funds shall, with effect from the date of commencement of the Act, be transferred to the newly established PSSSF. The Bill further directs the transfer of workers in the private sector as well as voluntary contributors to the National Social Security Fund (NSSF).
According to SSRA, currently there are seven social security funds in the country, with almost similar benefits. They are the National Social Security Fund (NSSF), PPF Pension Fund, Public Service Pension Fund (PSPF), Local Authorities Pension Fund (LAPF), Workers Compensation Fund, Government Employees Provident Fund (GEPF) and National Health Insurance Fund (NHIF).
Several consultations were made when crafting the draft Bill, with stakeholders proposing the merging of the funds into either one or two entities to reduce operational costs.
The International Labour Organisation (ILO) once advised the government to merge the pension funds into one or two entities to reduce the costs of pension benefits and operating costs, arguing that having many of them reduces their ability to offer quality services.