Minister designate for Employment and Labour Relations, Mr Ignatius Baffour Awuah
Four labour experts have waded into the debate on the extension of the retirement age with divergent positions.
The experts are the Chief Executive Officer (CEO) of the Ghana Employers Association, Mr Alex Frimpong, who welcomed the suggestion for the extension; labour consultants Mr Austin Gamey and Mr Senyo Adjabeng, who maintained that any such decision would be counterproductive, and the Director of the Labour Research Institute of the Trades Union Congress (TUC), Dr Kwabena Nyarko Otoo, who sought to handle the issue with tact and diplomacy.
When he appeared before the Appointments Committee of Parliament (ACP) last Wednesday, the Minister designate for Employment and Labour Relations, Mr Ignatius Baffour Awuah, threw his weight behind any plan to extend the compulsory retirement age of public workers to ensure the sustainability of the national pension scheme.
“When people stay longer in work, they accumulate more funds and are able to retire on more handsome pensions than when their working period is very short,” he had told the committee.
Mr Awuah said that when the Member of Parliament (MP) for Bawku Central, Mr Mahama Ayariga, sought his view on a private member’s bill he (the MP) was sponsoring in Parliament that would propose a further amendment to the Constitution to extend the compulsory retirement age from 60 to 65 years.
Speaking to the Daily Graphic yesterday, Mr Frimpong said increasing the retirement age was critical to the survival of the Social Security and National Insurance Trust (SSNIT).
He said the most critical issue was looking at the survival of the trust through the extended contribution of workers.
Mr Frimpong said the country could look at making the retirement age 65 if statistics on life expectancy supported that.
“Those working must be able to support those on retirement. If it happens that the ratio tilts in terms of numbers to those who are retired, it means that the sustainability of the scheme will be compromised,” he said.
“As part of the sustainability of the trust, we have been repeatedly told that if the pension age is not reviewed, we stand the risk of jeopardising the future of the trust. So some of the options are to look at the retirement age, increasing the rate of contributions and all that,” he added.
Mr Frimpong said the issue of the extension of the retirement age was worthy of discussion, since others had argued that young unemployed people needed to be employed.
He said what was important was that the economy needed to grow to create jobs that could absorb many people.
Gamey: It’s dangerous
Kicking against the suggestion for the extension of the retirement age, Mr Gamey, who is the CEO of the Gamey and Gamey Group, a human resource and labour relations solutions firm, said travelling on that path would worsen the unemployment situation that faced the youth and also kill the morale of other workers who aspired to rise in position.
“Honestly, it’s a very dangerous move,“ he told the Daily Graphic yesterday.
“The nation has a youthful population and every year thousands of brilliant and energetic young men and women come out of school, ready for the job market, so any system that will close the doors to them must not be entertained,” he said.
Mr Gamey further disagreed with suggestions that a longer working period would guarantee better pension for workers.
Explaining his position, he said the Pension Act provided good packages for workers and would not need an extension of the retirement age to make it better.
“It is unthinkable to suggest that people who are working and have second and third tier pensions, as well the SSNIT monthly pension, must be given an extension of retirement age o make them better,” he said.
He said he expected Parliament and employers to ensure that investments made by SSNIT were properly done in order to give hope to workers on retirement.
Mr Gamey also urged employers to provide enhanced incomes for their workers to guarantee them better pensions.
The labour consultant questioned the basis for which the minister designate said over three million jobs were created by the Akufo-Addo administration in its first term.
For his part, Mr Adjabeng said the country did not have the data to support any decision for the extension of the retirement age.
He said linking the extension to the survival of the pension scheme was only looking at one side of the issue, leaving out the other issue of unemployment, which was more serious and critical.
He said there was the need for a fairer balance, supported by data, before the implementation of such a decision.
Mr Adjabeng noted that with the current situation of the country, people needed to exit and enter employment in order to help address unemployment among the large number of graduates who come out of the various institutions every year.
On the issue of using the expertise of retirees, he said they could be engaged as independent workers who could offer advice to the system.
He said no economy lost experienced workers after retirement, and that it was how their experience was tapped which was important.
No official position by TUC
Dr Otoo observed that the country needed to extensively discuss the proposal in order to arrive at a consensus decision.
He said although the issue had been proposed on a number of times, it had not received thorough discussion.
Consequently, he said, the TUC had not taken an official position on the matter.
Sharing his personal position on the issue, Dr Otoo said there would not be the need to discuss the extension or otherwise of the retirement age when the underlining factors for such discussions were addressed.
He said all the issues raised could be addressed when the pension scheme was properly managed and the economy was also supported to provide more jobs.