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What You Need to Know About the Tier 3 Pension Scheme

What You Need to Know About the Tier 3 Pension Scheme

Following agitations from organised labour and pensioners on the inequalities in retirement benefits among public sector workers as well as inefficiencies in the SSNIT system, the government in 2004 set up the Presidential Commission on Pensions (PCP) with a mandate to submit proposals for pension reforms.

Subsequently, the PCP’s white paper was accepted by government and a Pensions Reform Implementation Committee (PRIC) was set up.

The work of the PRIC resulted in the promulgation of the new pensions law, The National Pensions Act, 2008, (ACT 766) on December 12, 2008.
This law highlights that all government employees (workers) including TEACHERS are to enjoy 3 forms of pension monies when we go on retirement.

TIER 1 is mandatory (it is 11% of your basic salary).This is managed by SSNIT. This money plus the interest accrued would be paid to the employee(teacher) on monthly basis when he goes on retirement.

TIER 2 is also mandatory(It is 5% of your monthly salary). This money would be managed by the various teacher unions in conjunction with a National Pensions Regulatory Authority (NPRA) licensed fund manager who would pay you the lump sum (i.e. the total contribution plus the interest accrued) when you go on retirement.

TIER 3 is optional or voluntary, but in the case of the Ghanaian teacher it becomes compulsory. This is because of the teacher unions we are members of and since we are deducted union dues every month, our unions are supposed to give us some money when we go on retirement. This money is not attached to any percentage but differs from teacher union to teacher union .

You are deducted 18.5% every month as SSNIT contribution. The breakdown is as follows:

TIER 1 = 11%
TIER 2 = 5%
NHIS = 2.5%
total = 18.5%

Currently, all the monies go to SSNIT who is supposed to forward the agreed percentages to the appropriate quarters.

But since 2010, these monies (i.e. the 5% or the TIER 2) has not been hitting the accounts of the various teacher unions as it is supposed to be even though members are deducted every month.

The various labour unions have been agitating over these unpaid monies for some years now which led to the strike action by the 12 labour unions some months ago.

Currently, the NPRA has asked the various unions to submit filled TIER 2 FORMS of their members to enable the monies to be paid and also ensure that each union member receive his TIER 2 benefits upon retirement.

The TIER 2 forms that are teachers are currently filling would again give them the quarterly updates of their contributions.

About Ellis Ferdinand

Ellis Ferdinand is the Founder/Chief Executive Officer of EducationGhana Limited and the Managing Editor at . He is a passionate writer,a publicist and an online Marketer and Promoter. He is Ghana's number 1 Education Blogger who brings all happenings in the Ghanaian Education Sector ,from Basic to Tertiary, to the doorsteps of readers on He is also the Founder of Education Awards Ghana which will soon be launched in Ghana to help boosts the Education Sector. He is Passionate about Promoting Education in Ghana, Africa and the world at large. Ferdinand Completed Accra College of Education and was Awarded a Diploma In Basic Education by the University of Cape Coast and Currently reading Psychology and Foundation of Education with Management and Accounting Options at the University of Cape Coast in Ghana. Ferdinand is willing to work with any organization who believes in Promoting quality business as well as Education in Ghana and Africa. You can Contact him for Promotion of Events,Advertisements,Publications and any other business through Education Ghana.


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