Private pension funds maintained a strong growth momentum in 2020, a report from the Bank of Ghana has disclosed.

According to the report, total private pension funds, grew by 26.8% in 2020, as compared to 33.4% in 2019.

At the end of December 2020, total private pension funds stood at ¢22.02 billion, as compared to ¢17.36 billion at in December 2019.

The report said the growth in private pension funds was remarkable, given the commencement of the decumulation of private pension funds and the granting of emergency access to pension benefit amid the pandemic.

In 2020, investment of private pension funds was held primarily in the form of government securities, constituting 60.2% of the total.

Pension fund under SSNIT rebounds

Meanwhile, growth of pension funds under the Basic National Social Security Scheme (BNSSS) rebounded in 2020.

From a negative growth in 2018 (-3.5%) and 2019 (-1.2%), pension funds under the BNSSS recorded a growth of 26% in 2020. The growth was mainly due to the settlement of part of government’s indebtedness to the scheme.

At the end of December 2020, total funds under the BNSSS stood at ¢11.35 billion, compared to ¢9.08 billion at the end of December 2019.

The report explained that downside risks to sustained growth in the outlook for the public pension funds include the late payment of contributions, rising outstanding contributions, increasing benefit payments, and weak investment outturn.