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Ghana’s Experience with Expanding Pension Coverage


The Ghanaian experience of expanding pension coverage is of particular interest because of the multiplicity of approaches being adopted and the way in which publicly and privately
managed occupational and personal pension provision has been successfully leveraged to expand overall coverage and adequacy of retirement benefits.

The boundary between formal and informal employment in Ghana is blurred so that it is not easy to gauge the extent to which provision has extended from formal to informal sectors; What can
be said with confidence, however, is that coverage broadening and deepening has been impressive for a nation at Ghana’s current level of development. Also, the extensive pre-existing
retirement savings infrastructure has enabled the implementation of micro-pensions without requiring a new infrastructure to be developed and in a way that can enable substantial coverage

Coverage of the active labour force in one form or another may already extend to over 20 percent, with around a quarter in the informal sector (0.5 million members when figures for the publicly
and privately managed schemes are combined). This is a good start but may be dwarfed by the recent innovation of the Cocoa Growers’ Pension Scheme having the potential to push overall
coverage up to 30 percent, half of which will be in the informal sector. Emulating this scheme for other types of informal workers, combined with the wide range of other initiatives being led by the pension regulator, could see that figure rise still higher.

This Chapter starts by providing some country-specific context, moves on to an outline of Ghana’s retirement benefits system, and then considers the various initiatives that have been taken to
broaden and deepen coverage before concluding with a review of the issues that have arisen and how these may be overcome, and concluding with a summary of learning points of potentially wider applicability.

Before going further, it is worth clarifying some nomenclature. Ghanaian legislation and practice refer to pension provision in all three tiers as being delivered by “pension schemes”, a term that encompasses the plan (legislative, occupational or contractual) to which members, providers and (where relevant) employers sign up, the fund that is accumulated to deliver the plan, and the associated managerial arrangements. As well as referring to the legal entities of individual schemes, the whole structure of retirement benefit provision is also sometimes referred to as a “scheme”, acknowledging that the different types of provision are intended to complement each other towards the delivery of Ghana’s public policy objectives for old-age financial support.