The National Pensions Regulatory Authority (NPRA) says it will soon begin the prosecution of companies that do not pay the tier-2 pensions of their employees.
The threat of prosecution comes after the Attorney General recently gave the pensions regulator prosecutorial powers to go after companies that default in their workers’ tier-2 pensions.
The National Pensions Act of 2008, Act 766, established a three-tier pension scheme consisting of three levels of contributions.
The mandatory first tier is remitted to Social Security and National Insurance Trust (SSNIT) with the tier-two, which is equally compulsory, paid on workers’ behalf by employers and managed by Private Pension Service Providers.
The contribution is pegged at 5% of the employee’s basic monthly salary. This cost is borne by the employee.
In an interview with Citi Business News, CEO of the National Pensions Regulatory Authority, Hayford Atta Krufi said employers that default in paying the tier-2 pension will no longer escape from the clutches of the law.
“One of the things that we have introduced to make sure that all workers who contribute to pension have retirement income security is to ensure that every employer by law is contributing towards pensions. We have 18.5 percent of workers salary which should go towards pension mandatorily”.
“Thirteen and a half percent will go to SSNIT and then 2.5 percent of that will go to the National Health Insurance Scheme and then 5 percent will go towards their occupational pension scheme.”
“The law says that if an employer fails to remit then they should be prosecuted. NPRA has now been given the powers to prosecute by the Attorney-General. We have been assigned specific courts that the prosecution can take place. Very soon all employers who are deducting but not remitting or not even deducting the mandatory 5 percent at all are going to face strict sanctions,” Mr. Atta Krufi said.