Ghana’S Pension Reforms in Perspective: Can the Pension Benefits Provide a House a Real Need of the Retiree?

Abstract

The Government of Ghana enacted another pension reform in 2008 to establish a three-tier Pension Scheme with the objective of enhancing pension payments, financial independence to the retired worker and also for capital mobilization for national development. The purpose of any policy reforms that seeks to protect vulnerability of people must be significant to address identified inadequacies in a previous one. This paper is very critical of the new pension reform (Act 716) of 2008 as it provides unrealistic benefit to the pensioner to meet vital needs (i. e A HOUSE), a cultural demand, the lack of it, is killing many retirees in Ghana. The significance of the concept of building a house in Ghanaian cultural setting and retirees is discussed extensively. The mortgage industry which the Act or Scheme relies on is also evaluated. The conclusions are very revealing that the mortgage industry in Ghana is very expensive, unaffordable and therefore unreliable to provide any low cost housing to low income earners and many civil servants in Ghana. The paper proposes that a holistic Pension Scheme that is focused and targeted to identified cultural needs must be established. Financial independence as emphasized in the pension reform act is good but myopic and cannot guarantee longevity.

Keywords: Pension Reforms, Retirees, House Mortgage.