Retirement income security under Ghana's three-tier pension model: Assessment of risks and options for reform

This article analyzes the newly introduced three-tier pension scheme in Ghana, showing that major transformation in the country's overall pension system was the insertion of two private-mandatory and voluntary-pillars to the existing social insurance scheme. The analysis shows that although private pensions were projected as instruments for giving individual citizens choice and freedom over their retirement decisions, the design of the three-tier scheme in Ghana has several risks and institutional weaknesses that can compromise the income security of the aged. Thus, it argues for the need to reform the new scheme by (a) establishing a statutory pension benefit insurance; (b) scaling back the number of pension service providers; (c) capping amount of each contributors funds that service providers can spend on administrative issues; and (d) activating constitutional provisions on social assistance to augment the three-tier model.