A Compliance officer with the National Pensions Regulatory Authority (NPRA) says low financial literacy is the cause of low patronage of the pension scheme among women and people in the informal sector.

Lois Asiamah said the lack of adequate and appropriate information concerning pensions has left a lot of Ghanaian women and others in the informal sector unaware of the opportunities and advantages of investing in a pension scheme.

She added that due to the lack of financial literacy, people in the informal sector especially women have failed to sign onto the tier three pensions scheme due to the fact that the tier three pensions are also not mandatory.

“The informal sector falls under the tier three and that one is voluntary, it’s not mandatory so then you’d realise that most people don’t do it since it’s not by force, it’s not demanded by the law, most people don’t take advantage of it. 

“And most of our women are suffering from this as well. They don’t take advantage of it. And it’s largely due to the fact that some don’t have that much information on pensions at all. There’s no pension literacy out there. And some don’t even have much information about the financial sector itself. So then they don’t have a lot of information about what they can do and what they cannot do.”

She stated that recent happenings in the financial sector, most especially the financial sector cleanup and its attendant problems have even further discouraged people from investing in a pension scheme.

According to her, doubts about the security of investments in banks and other formal financial institutions have led women and others in the informal sector to steer clear off pension schemes.

“And you know back in 2017 what happened with the banking sector, the cleanup exercise, and so then most people find shortcomings with that. They lost courage in the financial sector and they’re wondering, ‘Am I going to lose my money should I put my money in anything formal with the banks? Am I going to lose it? Am I going to be moving back and forth looking for my money when I’m old and frail?’ so then they don’t have much information about the things that we have to protect them,” she said.

However, Ms. Asiamah said people should be rest assured that their investments will be protected when they subscribe to a pension scheme.

According to her, several measures have been put in place to ensure that money contributed to a pension fund will be protected.

“With the pensions there’s lots of advantages. It’s not such that someone can take your money, take advantage of it and get missing, there are lots of protective covers for you when you’re doing pensions. And we have the tripartite system, we have the custodian, the trustees, the fund managers and they’re all doing their bits to ensure our retirement income security.”

She advised women to thus, take advantage of the pensions schemes and invest in order to secure their future.

She mentioned that in recent times contributing to pension schemes have been made easier through the connection of mobile money to pension accounts.

“So then we wish to empower most of our women and also the informal sector to take advantage and do something for themselves to get involved in the Pension schemes. So invest something no matter how little it is and you’d realise it’s done to suit us.

“And so then right now we have various platforms to that. We have momo, a lot of the trustees have different rollout programmes so you can use the mobile money to pay it, you can do it like the susu kind of thing, so it has been brought down to our level so let’s take advantage of this thing and make sure when we retire we have something to leave out.”