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History of the 3 Tier Pension Scheme

Concerns raised and agitations made by public servants over inadequacies of the level of pensions to sustain a respectable life for retired public servants especially the low pensions received by workers under the Social Security and National Insurance Trust (SSNIT) Pension Scheme introduced in 1972 compared to those under Chapter 30 of the 1950 British Colonial Ordinances (Pension Ordinance No. 42), popularly known as CAP 30, led to the initiation of processes to reform pensions in Ghana.

In addition, pension schemes that operated in the country at the time also failed to consider the plight of workers in the informal sector who constitute about 80% of the working population in Ghana.

The concern rose to a peak in agitation and protests by workers’ organisations for the restoration of public service pensions to the level of CAP 30 to replace the SSNIT system that had been the mandatory and universal pension scheme for all employees.

In recognition of the need for reforms to ensure a universal pension scheme for all employees in the country, and to further address concerns of Ghanaian workers, the Government in July 2004 initiated a major reform of the Pension System in Ghana. The process started with the establishment of a Presidential Commission on Pensions under the chairmanship of Mr. T. A. Bediako which reported its findings to the Government in March, 2006. Following consideration of that report, the Government issued a White Paper in July 2006, which accepted almost all of the Commission’s recommendations. In order to implement the new pension system, an 8- member Pension Reform Implementation Committee (“the Committee”) and a Consultant was appointed in October 2006.

The Committee commenced work in November, 2006 and as part of its Mandate submitted proposals for National Pension Reform Bill to Government in 2007. Cabinet approved the Bill and submitted it to Parliament for passage into law. The Bill was passed by Parliament and received Presidential assent in December 2008. A new Pensions Law, the National Pensions Act, 2008 (Act 766) was promulgated on 12th December, 2008 and mandated the establishment of a new contributory Three-Tier Pension Scheme with the National Pensions Regulatory Authority (NPRA) to oversee the efficient administration of the composite pension scheme.

The New Pension Scheme was launched on 16th September, 2009 and its implementation started in January 2010.

In 2014, the National Pensions (Amendment) Act, 2014 (Act 883) was passed by the Parliament of the Republic of Ghana and gazetted on 31 December 2014.

Act 883 amends some of the major provisions under the First Tier Scheme of the National Pensions Act, 2008 (Act 766) such as the age limit exemption, payment of emigration benefits to non- Ghanaians, the computation of pension rights and other related matters.

The 3 tier Pension Scheme

Overview of the 3-TIER Scheme





Tier 1

Mandatory Basic Pension Scheme

SSNIT Managed

11% (PLUS 2.5% to )NHIL

Tier 2

Mandatory Occupational Pension Scheme

Privately Managed by licensed approved Trustee & Other Licensed Players


Tier 3

Voluntary Personal Pension Scheme.

Privately Managed by licensed approved Trustee & Other Licensed Players

Up to 16.5%  Tax Exemption




Up to 35 %.


How the Second Tier Scheme Is Funded 



Benefits of the Second Tier Scheme

  1. Members will be entitled to receive a Lump Sum payment of all benefits accrued under the scheme on the grounds of;
  • •Mandatory retirement age (60 years)
    • Voluntary retirement age (55years)
    • Death (no age restriction)
    • Total incapacity (no age restriction)
    • Permanent Emigration(for expatriates)
  1. Investment income is tax exempt
  2. Monthly contributions are tax exempt
  3. Ensures retirement income security


History of the Health Sector Occupational Pension Scheme (HSOPS)

Following the launch of the new 3 Tier Pension Scheme, it was expected that employers in the public and private sectors would make efforts to institute 2nd Tier Schemes for their employees. However, many employers did not even understand the concept of the new Pension Scheme.

Organized Labour with the support of Friedrich Ebert-Stiftung foundation organized a workshop for Union leaders at Ho in 2012 where the teething Ghana Education Service (GES) Pension Scheme and Mines Scheme were presented as case studies.

Within the course of the two-day workshop, representatives of Ghana Registered Nurses and Midwives Association (GRNMA) and Health Services Workers Union (HSWU) present agreed to work together to form a common 2nd Tier Pension Scheme for their members.

 This led to the formation of a Working Group which worked with a consultant by name Mr. Adu Mensah, an Actuary who guided the team to lay the necessary foundation for the establishment of the HSOPS.