Employers urged to create provident funds

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wpid-cedi-bug.jpgEmployers should create provident funds for their employees in order to fully optimise the benefits of the new three-tier pension scheme, Chief Executive of Capel Pensions Advisor Lillian Ricketts-Hagan has said.

She said human resource professionals must advocate the creation of these funds at their workplaces and continually educate their employees on the benefits of the new pension scheme.

She was speaking to human resource professionals in Accra at the monthly Society for Human Resource Management (SHRM) forum under the theme, ?Making the New Pensions Act Work for You.?

?The HR can act as an advocate on behalf of employees because they are the link between the employer and employees. They can convince the employer to set up a provident fund scheme that will boost the employees? retirement income.

?The HR can therefore organise training for employees to help them understand the pensions scheme, what type of benefits they are entitled to, when they can get their benefits, and who the fund managers, trustees and administrators of the scheme are.?

She said currently some employers have included HR professionals as members of the board of trustees of their provident funds, which is a good thing.

?In some companies, HR professionals are doing a lot to expand the new pension scheme because they are allowed to sit on the board of trustees of the individual pension schemes.

?When they sit on the board of trustees, not only do they protect member interest but they also advocate and negotiate the benefits that members should get from their pension scheme. In so doing they get firsthand information from the trustee meetings, which can easily be disseminated to employees.?

Mrs. Ricketts-Hagan said because pension funds are invested in Government Treasury bills and bonds, they provide an additional pool of resources that can be used for infrastructure development.

?Pension funds are very useful for the economy of this country because they can be used for infrastructure development. If we are able to mobilise pension funds within the country, we can support some of the infrastructure development we need,? she said.

Mrs. Ricketts-Hagan added that pension funds can also reduce the rate of borrowing from outside because the funds provide resources for government to borrow from within.

?Borrowing from within is always better because you are not suffering from foreign exchange risks. If you go and borrow cedis to fund projects which are priced in cedis, it is always better than borrowing in euros or dollars whereby you can suffer foreign exchange risks because the exchange rate is always rising and you always have to buy forex to pay back your loans.?

President of SHRM Ghana Kojo Amissah urged all HR Managers to help establish provident funds in order to secure the retirement benefits of employees.

By Bernard Yaw ASHIADEY

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