Ghana Pensions Awards
Over the past year, the Ghanaian pensions market has been defined by an increase in assets but a stronger gaze of regulators. Amid this mixed environment, the Ghana Pensions Awards 2022 seeks to recognize the businesses that are providing a sustainable template for the local industry’s future.
Since the introduction of a new pensions regime, the three-tier pensions system in 2008 which came into effect in 2010, the Ghanaian pension industry has seen exponential growth from only the Social Security and National Insurance Trust (SSNIT), CAP30 funds and a few provident funds to several custodians, fund managers and trustees.
Back in 2010, the total assets of the entire industry was not more than GH¢5billion but today, the total assets under management by just the private pension funds as at December, 2018 was GH¢13billion with SSNIT’s assets growing to GH¢9.2billion with the same time, which brings the entire asset of the industry to more than GH¢22billion which is gradually inching towards 10percent of the economy’s Gross Domestic Product.
The industry now has its own regulator, the National Pensions Regulatory Authority (NPRA) and supported by other financial sector regulators such as the Securities and Exchange Commission (SEC), the Bank of Ghana (BoG) and the National Insurance Commission (NIC). The sector now has more than 20 pension trustees for Tier 2 funds, more than 15 trustees for Tier 3 funds and more than 20 custodian banks. These institutions work with more than 50 fund managers to provide the best returns to pensioners.
Also, evident from data coming from the stock exchange, private pension funds are now some of the biggest players on the bond and equity market. In the past, SSNIT has been the only pension fund investing in stocks and bonds on the stock market. Even though SSNIT is still the biggest largest institutional investor on the market, private pension funds are coming onto the market thick and fast.
Since independence, the economy hardly paid any attention to the informal sector, which is the biggest contributor to GDP, but for the past three decades, the informal sector has received the biggest attention with government and other stakeholders working aggressively to formalize the sector and generate the required revenue for development of the country. Banks, insurance companies, telcos and others sectors are fashioning out products and services targeted at the sector and the underpinning foundation for their success is technology.
The pension sector is no different. The industry, including the biggest player, SSNIT, is working to introduce products and services to secure the retirement future of the millions of Ghanaians who operate in the informal sector. Some pension trustees exist with the sole aim of serving the informal sector and even though they are facing significant challenges, the future looks bright with the introduction of tech-based programs such as the National ID, Ghana Post GPS and others.
However, given the conservative approach many people take to their retirement savings, the industry lacks the drama and adventure that is commonplace in the private banking and venture capital sectors. A little bit of risk is fine – even necessary – but when it comes to retirement, there are very few people willing to bet on the proverbial two in the bush over the one in the hand. But across the relatively sleepy pensions sector, a storm is brewing. The industry is a behemoth of the Ghanaian economy, particularly in terms of assets managed, and commands a tremendous amount of force and 2020 would begin to serve the test of mettle of the industry.
This aversion to risk, accompanied by a lack of innovation, has led to several critical challenges across the sector. Looking to end people’s malaise as well as boost returns to members, regulators, such as the Securities and Exchange Commission (SEC) which regulates the fund managers or investment banks, are stepping in to take control. It might have been easy to slip under the radar before, but under performing funds will soon have nowhere to hide. The measures that may be put in place would add an unprecedented level of scrutiny and make it impossible to operate at any level that is less than excellent, which when it comes to pensions, must be expected.
The Ghana Pensions Awards is being launched to give recognition to and honour the pension trustees, investment firms or fund managers, consultancies, advisory firms and other pension service providers that have set the professional standards in order to best serve Ghana pension funds over the past years.
The Ghana Pensions Awards will be rewarding excellence in Ghana’s highly diverse and innovative pensions industry for the past 10 years and is the premier event of its kind with the largest annual gathering of pension funds in Ghana. The Ghana Pension Awards each year will recognize the bar-raising achievements of the diverse pension funds across the country and celebrate excellence by creating a meaningful broad set of benchmarks.
The overall aim of these awards is to recognize providers that offer the highest level of innovation, performance and service to occupational pension schemes and their members – and have done the most to improve this level of performance, service and innovation over the past years.
The Ghana Pensions Awards will celebrate the leaders who will shape the dramatic overhaul the sector will soon endure. The firms receiving awards this year are those that have demonstrated an ability to adapt to any market conditions, and are positioned to be trendsetters for the foreseeable future. With the myriad challenges the future will bring, winners will be sorted from losers. The Ghana Pension Awards 2022 will identify the companies to watch and highlight those that are setting higher standards in the country.