Labour unions have opposed the decision by the government to impose a ‘haircut’ on pension funds in the coming years as part of a broader debt restructuring process of achieving economic resilience.
The government is currently finding alternatives besides a $3 billion loan from the International Monetary Fund (IMF) to fix the economy, which the nation hopes will attract investors.
Many Ghanaians were concerned about the erosion of interests and their principals in relation to government coupons.
As Finance Minister Ken Ofori-Atta launched the exercise on Monday, December 5, he said: “Treasury Bills are completely exempted, and all holders will be paid the full value of their investments on maturity. There will be no haircut on the principal of bonds. Individual holders of bonds will not be affected”.
“Existing domestic bonds as of December 1, 2022, will be exchanged for a set of four new bonds maturing in 2017, 2029, 2032 and 2037,” he said. “The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% in 2025 until maturity”.
However, labour unions have kicked against the move.
President of the National Association of Graduate Teachers (NAGRAT), Mr Angel Carbonu, who addressed the media in Accra today, reiterated the government’s decision by citing the challenges public sector workers were exposed to whilst on pension.
According to him, “the economic situation has affected all of us. Why do we add salt to injury by now cutting people’s investment. Don’t forget this (Tier 2) involves drivers who sometimes get a minimum salary”.
“This is unimaginable. It is unimaginable,” he added.
He also disclosed that organised labour unions would be having a consultative meeting at the GNAT Hall in Accra tomorrow to discuss issues concerning the pending base pay increment between the government’s agenda of ‘haircut’ on pensions funds as well.
President of the Ghana Registered Nurses and Midwives Association(GRNMA),Mrs. Perpetual Ofori Ampofo, was also concerned by the government’s decision to intrude into pensioners’ funds.
“They shouldn’t touch the money. They shouldn’t touch it at all. If we want to generate revenue and in order to be more sustainable in terms of getting to the GDP ratio then we have to have a national conversation on this matter and see how we can address it. You come and touch our pensions? It is not the best,” she stated in an interview whilst addressing the press.
Meanwhile, the Health Services Workers Union (HSWU), in a press conference on Sunday, December 4, 2022, also expressed their displeasure with the ‘haircut’ on pensions funds.
Mr. Franklin Owusu Ansah, the General Secretary for the Health Services Workers Union, addressing the media and the participants at the gathering, noted that “The attempt to touch the pension and pension funds in the quest to restructure debts means that the government is tampering with the present and future workers who had the hope of sacrificing today, to have a better future tomorrow”.
“We are on this premise assuring the government that the Health Services Workers Union shall resist any attempt by the government to give any kind of haircut whatsoever on pensions because our future is at risk.
“We will fight this with the last drop of our blood to make sure that pension funds are safe,” he added.
The unions have therefore assured their members to remain calm as they continue to negotiate with the government on the need to increase the base pay of public sector workers by 65% and rescind the decision on ‘haircut’ on vulnerable pensioners’ funds.