The Executive Director of the Africa Centre for Retirement Research (ACRR), Abdallah Mashud, has revealed worrying findings regarding pension benefits under the new Pension Act 766, implemented in 2020.

According to him, upon evaluating the socio-economic impact on retirees under the new legislation, a staggering 81 percent experienced benefit shortfalls.

These shortfalls, he explained, occur when the pension benefits received under the new law are significantly lower than what retirees would have received under the previous legislation.

Explaining what could have accounted for it on JoyNews’ PM Express, Mr Mashud said, “It's a lot of factors, including regulatory lapses, benefit processing inefficiencies, and delays in investment income.”

“As far as Tier-2 is concerned, it is a defined contribution scheme. So the accumulated benefit at the point of exit is made up of the worker's contribution plus the investment income. So if the investment income does not come in on time, definitely there won't be enough time for the contribution to be invested,” he told host Evans Mensah on Tuesday.

The Executive Director of ACRR further revealed that the impact of these benefit shortfalls is evident across multiple years.

While 81 percent of retirees experienced shortfalls in 2020, the percentage decreased slightly to 62% in 2021.

However, Mashud noted that benefit shortfalls persist, indicating an ongoing issue within the pension system.

On the same programme, the president of the National Association of Graduate Teachers (NAGRAT), Angel Carbonu, revealed that the last time the government disbursed Tier-2 pension funds was in June 2023.

Mr Carbonu emphasised the dire consequences of this delay, particularly in cases where workers may urgently require access to their invested funds, such as in the event of sudden illness.

He explained that affected individuals would only receive their invested funds minus the deductions made since July 2023, resulting in reduced returns and financial insecurity.