Banking sector shake-up puts a strain on confidence in informal sector pensions

Banking sector shake-up puts a strain on confidence in informal sector pensions
Source: Ghana | Shiela Tamakloe | JoyBusiness
Date: 17-10-2018 Time: 06:10:25:pm

Chief Executive Officer of the People’s Pensions Trust is urging all regulators in the financial services sector to work on restoring confidence in the sector in order to boost pension penetration in the informal sector.

According to Samuel Waterberg, this has become necessary as the recent shakeup in the banking sector has led to a lack of public confidence in the financial service industry.

Speaking at the launch of a Life Bonus Policy, he said “as an industry, we need to restore the trust that some of our competitors have spoilt. Although people know that the pension products are good, they are afraid to put in their monies because they don’t know whom to trust.”

On his part, the Executive Director of Star Microinsurance Services Limited Kwame Asare Boakye, partners of the Peoples Pensions Trust in the launch of pension life bonus for members in the informal sector also explained there has been a decline in contributions following the shakeup in the banking sector. 

He sighted an example that “what we are seeing now is that if someone used to pay about GH₵20, now he or she only pay about GH₵5 because he or she is afraid to lose money”

However, both CEO’s added that with an effort from the regulators and education, the challenge can be fixed.

The Bonus Life Policy is an innovative product designed to give extra value to the people's pensions trust tier three informal sector pensions scheme members.

It entitles the nominated beneficiaries of a deceased member to a sum assured equivalent to four times the total contributions made by the deceased member during the previous calendar year, in addition to the outstanding balance in the deceased account.

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