Total pension funds of the Three-Tier Pensions Scheme increased by 18% in 2021 to ¢39.6 billion, the latest Financial Stability Review by the Bank of Ghana has revealed.

This is however lower than the 27% recorded in 2020.

The decreased growth rate was attributable to the ongoing lump sum payments under the private pension schemes and a marginal growth of the Basic National Social Security Scheme (BNSSS).

Also, private pension funds continued on a positive growth track in 2021.

Total private pension funds grew by 27.2% in 2022 to ¢28 billion.

The sustained growth in private pension funds, the report, said could be linked to better returns on investments and also the prosecution of defaulting Tier 2 employers.

Again, investments of private pension funds were still held primarily in government securities constituting a total of 84.0%.

From a total Assets Under Management (AUM) of ¢11.44 billion in 2020, the year-end AUM for 2021 was ¢11.54 billion.

The major risk exposures of the scheme, the report said remained the private and public indebtedness to the scheme, increasing benefit payments and low real rates of investment return