The Effect of Expansion of Coverage and Employers’ Compliance on Pension Fund: A Case Study of SSNIT Teshie-Nungua Branch
Date
2019-05
Authors
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Publisher
University of Ghana
Abstract
The main purpose of the study was to examine the effect of expansion of coverage and
employers’ compliance on pension fund. The study employed the convenience sampling design
and sampled 150 Employers on the SSNIT scheme and 50 Staff of SSNIT for data collection
purposes. The data was analyzed with the Statistical Package for Social Sciences. On the level of
employers’ compliance, it was identified that employers pay their workers’ contributions
regularly by the deadline for prudent investment of the pension fund and also, there has been a
decrease in the non-compliance of workers’ contributions payment by employers due to
enforcement of the compliance law. However, most of the employers have never faced a penalty
on delayed payment of workers’ contributions. The overall level of compliance by the employers
was noted to be high. The leading causes of employers’ compliance on pension’s scheme were
observed to be the idea of retaining employees and stringent penalty rates. Other causes such as
financial security in the future and legal obligations attached to pension scheme compliance were
added by the employers. With references to the effects of employers’ compliance on pensions,
the study noted that there has been an increase in pension funds and meeting investment
expectations of pension funds. Nevertheless, the pension funds were not properly invested. In
addition, the staff members were of the view that they achieved most pension fund goals, and
SSNIT mostly benefited from the expansion of coverage. The overall rating of the success of the
pension fund, which results from expansion of the scheme was considered good by the staff
members. Based on the results of the study the following recommendations are worth
considering. Since pension funds were not invested promptly and does not yield required returns,
it is recommended that the management of pension funds should establish a strong organizational structure and policy implementation, which will enhance their portfolio
composition. A solid organizational structure will also influence the firms’ investment portfolio
choice leading to improved investment returns. In addition, the study recommended that
payment of contributions by employers should continue adhering to the set regulations. From
the study findings, regulation was found to have a significant influence on payment of
contributions by employers and hence, managers of the Trust should put more measures in place
to ensure that they are compliant. To ensure timely payment of contributions by employers, and
deal with misappropriations of pension funds and investment/assets, SSNIT authorities must
ensure effective implementation of the penalties provided by the non-compliance law, regardless
of their position, status, affiliation or origin. Pension Fund Administrator should be transparent
in their dealings and accountable to their clients through regular update of the employees’
contributions status. The contributory pension scheme should be encouraged by its practitioners
in the form of provision of adequate means of sensitization or interactions such as seminars to
continually update employers and employees on the benefits of the pension scheme and its
importance on life after retirement.
Description
EMBA.
Keywords
Pension Fund, SSNIT, Teshie-Nungua