Ghana’s new Pensions Law - The National Pensions Act, 2008 (Act 766)

A Summary of the new 3-tier pension regime

	Tier 1 Basic national social security scheme	Tier 2 Occupational or work-based scheme	Tier 3 Provident fund and personal pension schemes supported by tax benefit incentives
Legal Status	Mandatory for formal sector workers;                     Optional for self-employed workers		Voluntary
Governance	National Pensions Regulatory Authority (NPRA) –the national pensions regulator that oversees both the public (SSNIT) and other privately managed schemes
	Social Security and National Insurance Trust (SSNIT)	Privately Managed by: *Trustees *Custodians *Fund Managers (licensed by the Securities and Exchange Commission)
Main Beneficiary Targets	Public and private sector workers  in formal employment		Informal sector workers in particular and formal sector  workers
Pension Benefits	*Full or Reduced Monthly pension till age 75 *Invalidity Pension *Survivors’ lump sum calculated on 15 years contribution instead of 12years before	Lump sum pay outs based on accrued contributions  and returns on investment
Qualifying Period	15 years instead of 20years before	Period of Contribution
Eligibility	*Retirement *Voluntary Retirement *Incapacitation * Death	*Retirement *Termination of service * Death
Contributions	Employer – 13%,  Worker – 5.5% Total contribution to 1 & 2 tiers = 18.5%		Voluntary
	13.5%  (2.5% levied to health insurance)	5%
Tax Exemption	Total tax exemption on contributions up to 35%
	Contributions up to 18.5% (i.e. full exemption)		Contributions up to 16.5% (contributors to the 3rd tier who do not contribute to the mandatory schemes will get full 35% tax exemption)

General Comments:

o   The pension law assures that future pension benefits under the 2^nd and 3^rd tier schemes can be used as collateral for mortgage loans. In other words workers can acquire their homes before retirement. However, it is not yet clear, how this will be facilitated by the state and how it will be operationalized between contributors and the various private pensions managers.  

o   The new law also claims enhanced benefits under the schemes than was possible under the earlier pension schemes. This is true with respect to reduced qualifying period and increased period used to calculate survivors’ benefit under the basic pension scheme. With the second and third tier schemes, quality of fund management, investment choices and market forces determine to a great extent what pension is possible.

o   The new law states that credits accrued in respect of contributions for past service towards the 25% lump sum payment under the SSNIT scheme would be determined and paid in an equitable manner. It is not yet clear how this is to be done.

In the pension scheme that existed before the new law came into force, workers eligible for pension received a onetime lump sum in addition to monthly pay outs from SSNIT till age 75. Under the new law, workers will only receive monthly pay outs from SSNIT. The law seems to be talking about the past contributions already made by workers who were on the old SSNIT scheme towards the lump sum component of their pension.

As the law takes root, these issues are bound to be raised and cleared. I hope to update this summary as the coast gets clearer. At present employers are feverishly doing their best to streamline existing schemes with the new law and sort out the systems that need to be put in place for the smooth management of the schemes. 

Further information can be found on the NPRA website.

The Exercise of Leadership

Do you always know what people really mean when they make statements to the effect that someone is a good leader, bad leader or even a natural leader? Such statements often require further elaboration and often times they refer to people’s expectations of and the responses to those expectations by someone else other than themselves; someone usually in authority and felt to have the ability to wield some power or influence.

Debates about leadership have long raged and have developed from those about whether leadership is innate or can be learned; through those about characteristics of leadership and what effective leadership looks like; to leadership styles and whether there is one best style of leadership or that indeed the situation determines the style of leadership or that leadership style is situational.

The possibility that leadership qualities may or may not be innate holds little relevance for me. It seems to me that even so-called “natural leadership” qualities or tendencies need to be recognized and nurtured in order that they may be expressed appropriately otherwise those same qualities are unlikely to be experienced as leadership. The question is, there comes a time when leadership must be exercised and when that time comes, who is to exercise that leadership and how is that leadership to be exercised?

It is not my intention to review or restate the various viewpoints about leadership here. Much has been written about the subject. My sense of the key points is that, the capacity to influence a situation must exist, but that alone is not enough. This capacity must be focused on a cause and deployed in appropriate ways and at appropriate times to be characterized as exercising leadership.   

I make a few deductions on my summation of the concept of leadership;

First, it is action oriented. So that when one refers to another as a leader, what is actually meant is that the person has exhibited or consistently exhibits leadership in a variety of contexts. The leader makes things happen. This is very different from referring to someone as the leader of a group, association, etc. The latter is a reference to position, title, job that does not represent the exercise of leadership even though there is some expectation that “the leader” will exercise leadership.

Caution is necessary here not to equate “action” to visibility or heroic acts. I am quite attracted to the type of leadership I will call “quiet leadership” which recognizes the need for and provides support, space, opportunities, motivation that initiates, activates and results in the achievement of group or common objectives. Such leadership unfortunately is often times hardly acknowledged and yet I suspect it is this type of empowering leadership that is needed more and more in today’s workplace.

That leads me to the second point; which is that leadership is not the preserve of managers, supervisors or any other “leader” position. It couldn’t be; for the simple reason that nominal leaders are not the only ones with leadership capacity and therefore leadership could be exercised by anyone at anytime, even by those who are not conscious of their capacity to “rise to the occasion”.

Third, leadership is situational. This means, the exercise of leadership is directly related to the context within which it manifests. The idea of a best style of leadership therefore is tenable only so far as it is the “best” in a particular context. The idea of a one best way to lead on the other hand would be pointless.

Finally, and this is an important one. Leadership is not about being “nice” or “good” to people. Sometimes to get things done, resolve a situation or ultimately to achieve that important objective, the leadership required involves some tough decisions and actions. Leadership is not for the fainthearted. 

The significance is that these ideas have a direct bearing at the work place and more so in the particular sociocultural context in which I live and work.

At the workplace (and indeed even socially) leadership is often both imposed and expected of a select group of people through formal and informal structures. Our notion of what leadership represents and how it must be exercised affects the relationship between the “leader” and others and how therefore work is carried out.

If it is felt that leadership responsibility is in the purview of only the “leader figure”, then chances are that the “leader’ will be at all times striving to be seen to deliver leadership (successfully or not) instead of opening up space for leadership to be exercised by others according to the strengths and weaknesses of the group. Others in the group will also defer to the leader figure and will either be constrained or unwilling to step up to the plate when necessary. 

The situation is further complicated in a cultural context which places natural leadership responsibility in older people and in superiority. While age, long service and a superior office may often translate into relatively more experience and knowledge at the workplace, it is not necessarily the case. Even when it does, experience and competence do not make one a leader. Therefore while the expectation that leadership should be offered by older, more knowledgeable, skilled and superior colleagues may be legitimate; it is unfair to expect that leadership capacity is naturally present in such people.

On the basis that leadership should in fact be a shared responsibility, it is my view that one of the critical qualities of leadership should be the ability to recognize, acknowledge and mobilize the capacities and resources of the group. Leader-managers therefore need not be leading in all situations. In this, humility and self knowledge of the “leader figure” are key.

Consequently those expected to lead in work places should receive support and be willing to develop their leadership capacity.  Ultimately, people in workplaces must develop leadership capacity whether they occupy positions of authority or not since their ability to exercise leadership in situations that may require their action is increasingly expected. This orientation necessitates a cultural change in which managers and supervisors do not feel threatened by the exercise of leadership by others.

Who Is The Professional At The Workplace?

Typically, the term “professional” is used in context to refer to different ideas about work or the one who does it; a person who exhibits certain behavioral qualities thought to represent “excellence” particularly in how work is done; a person who occupies a job at a certain level in the hierarchy of an organization; a person who’s job falls within a loosely defined range of careers; a person who is seen as competent at what they do; the quality of the output of work as in “a professionally executed job”.

                                               

The seeming conflicts in the defining parameters make it challenging to determine sometimes who could be referred to as a professional. I have on occasion had difficulty filling out information sheets that require a differentiation between categories such as Management, Technical or Professional Staff, Support Staff, Administrative Staff. As if to suggest that professionals cannot be found in some categories of workers. So for instance, the Accounts Officer or the I.T. Officer tends to be placed in the Support Staff category for reasons other than that those positions rely on technical, specialized knowledge and skills that often require certification.

The work place is filled with people executing work of all types; cleaners; drivers; mechanics; administrators, engineers, secretaries; draughtswomen, lawyers. All of these jobs can and should be filled with professionals. Indeed the ultimate objective of any recruiter should be to find the best “professional” for any position. I would therefore not differentiate “professionals” on the basis of the type of work or career or indeed the status of a job in the organization.

So then, are we professionals because we have “professions”? I doubt that is so and the answer for me is in the variety of the references to who the professional is above. The professional for me combines the competency, behavioral and self-presentation qualities related to and expected in his or her line of work or position. A popular definition is this: “the conduct, aims or qualities that characterize or mark a profession or a professional”

  

I believe that many of the characteristics cut across professions. Here are my top rather loaded characteristics of the professional at the workplace:   

1.      They not only possess the knowledge and the skill needed to undertake the work they do; they are flexible in applying their knowledge and skill to address work related issues.

2.       They are open to new ideas and constantly explore new ways of improving their work methods and outputs. Bottom-line, they are lifetime learners who constantly seek ways to improve their work.  

3.      They produce outputs or products and services to a standard and of a quality generally accepted as satisfactory by consumers and to industry standards.  

4.      They behave ethically. No gossip, no lies, No cheating, no stealing,

5.      They require no supervision to get the job done.  

6.      They present themselves and comport themselves appropriately at all times. That is they look the part and act the part.

7.      They are polite

I will elaborate on the characteristics in another post. In the meantime what would be your ideal characteristics of the professional?