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A Deeper Dive Into The Pension Industry With Mr. Laud Senanu



Expertise and commitment are definitely two qualities that will be instrumental on the board of trustees of a pension scheme.  In our newsletter this week, we had an in-depth chat interview with Mr. Laud Senanu, an independent trustee of our schemes who possesses both qualities.

Mr. Senanu’s entire working life has been in the pension industry and he shares with us his achievements during his active years and his impression of the pension industry today.

PPT – Tell us a little about yourself.

My full name is Laud Alan Kofi Senanu, I am a Lawyer by profession. I worked the greater part of my life with Social Security and National Insurance Trust(SSNIT) and I retired in October 2017. At the time I retired, I was the General Manager in charge of Operations. Currently, I’m into private legal practice,  and as you are aware I’m also an Independent Trustee at Peoples Pension Trust (PPT)

PPT - What does your current role as an Independent Trustee entail?

LS - As you are aware, under the Pension Act 766, the highest decision-making body of a registered scheme is the Board of Trustees. The Board of Trustees is composed of representatives of the members, the Corporate Trustee, and an Independent Trustee licensed by the National Pensions Regulatory Authority(NPRA). The Independent Trustee is not related in any way to the Corporate Trustee. He is expected to play a watchdog role and act as a good conscience for the Board of Trustees. That is the role I play on the Board of Trustees for the schemes being run by PPT

PPT - So your last role before you retired was with SSNIT, tell us about your experience there?

LS - That is correct, before I became General Manager Operations, I had worked in various departments in the trust. I had worked in the Legal, Prosecutions, and the Compliance departments, and I had also been an Area Manager, first in Takoradi and later in Accra, specifically in the Accra-South region. I had also acted briefly as the Head of the Benefits Division and it was whilst acting in that role that I was seconded to the NPRA as the acting CEO in November 2013. I came back to SSNIT in July 2015 and was subsequently appointed as the General Manager Operations, a position I held until my retirement in October 2017.

PPT - Between the different roles you performed at  SSNIT and at NPRA which achievement(s) stands out for you?

LS - Okay, I will say that at SSNIT, the creation of the Compliance Department was the most significant achievement for me. Before the creation of the Compliance Department, The Trust  Compliance enforcement function was split between two divisions, Operations and Administration. The Compliance activities such as registration of employers and workers, collection of contribution reports, issuance of statements of accounts, an inspection of employer records, issuance of demand notice to employers for non-compliance, and retrieval of contributions in arrears were all activities performed in the branch offices under Operations. The Prosecution of employers who failed to comply with the obligations was undertaken by the Prosecutions Unit of the Legal Department, which was under Administration. This created inefficiencies in the Compliance enforcement structure. Subsequently, we were able to bring together the two functions under one department which we initially named Compliance and Prosecutions Department, and later, simply, Compliance Department. The new department was under the Operations Division and now operated seamlessly and enhanced the compliance enforcement activities of the Trust.

By the time I retired, the department had grown in stature, so we had to divide it into two; Compliance Department and Prosecutions Department, both operating under Operations. This development contributed immensely to the Compliance Enforcement efforts of the Trust and I am happy to have been part of  the process

PPT – Great, so that was for SSNIT, what about your tenure at NPRA?

Now when I joined the NPRA, as you will recall, the new Pensions Act had been passed by Parliament in December 2008 but became operational in January 2010, which was when the actual implementation of the law started. This Pensions Act introduced what we call, the Three Pillar System. The First pillar being the basic scheme which was operated by SSNIT and was compulsory for workers and employers. The Second pillar was what we refer to as the Occupational Pension Scheme, which again was compulsory and applied to all workers who were covered under the First pillar, which is the SSNIT basic scheme, except new workers who were above 45years and workers who were 55 years and above (this was later reduced to 50 years by Pensions Amendment Act 883). These were the only persons who were exempted. Then we had a Third pillar which was a voluntary scheme targeted at the informal sector; so self-employed persons, persons with no stable employment could all subscribe to the Third tier schemes and also enjoy some form of social security. The 2nd tier and 3rd tier scheme under the law were to be managed by private service providers registered and licensed by the NPRA. At the time I joined the NPRA in November 2013, the process of licensing and registering these service providers had begun.

Before that, SSNIT had, from the very inception of the scheme in January 2010 been mandated to collect the contributions from employers and pay it into designated accounts at the Bank of Ghana, which funds were being administered by the NPRA with the support of some Fund Managers(this was referred to as the Temporary Pension Fund Account, TPFA) So once we started registering and licensing the service providers, the expectation was that these monies will be transferred to them immediately, but this process delayed for quite some time.

When I took over as Acting CEO, this delay of the transfer of monies under the TPFA was one of the major issues that confronted me. There was so much pressure from the Service Providers so we had to quickly put in place strategies for the transfer of the funds to the various schemes.  This involved reconciliation of the data on all members, the auditing of the TPFA accounts at the Bank of Ghana and designing a structure for the smooth transfer of the funds to the various schemes.  

This activity was very important for the Service Providers because they needed those funds to improve on their Assets Under Management through which they also earn some fees that they use to manage their businesses. So you can imagine how they felt when these funds were not coming, and our ability to put in place a structure to be able to transfer the funds to them was one of my happiest moments at the NPRA.

PPT - What is your impression of the pension system in Ghana as we have it now?

LS - I think that the pensions landscape has improved, it is growing gradually and at the last count, the Assets Under Management of the 2nd and 3rd  tier schemes was more than that of the basic scheme run by SSNIT. The Regulator, NPRA has also gone through several changes which have led to remarkable improvements in their activities. They are now in a stronger position to play their role as The Regulator in the pension industry in Ghana.

So I think there has been a lot of improvement in the pension industry which is good because pensions play a very important role in the economy. The more we can mobilize savings in the industry, the more we can get employers to honor their obligations fully, and invest the funds prudently, the better it will be for the economy. So it can only get better for The Pension industry.

PPT - What do you think Corporate Trustees like us can do to drive the financial inclusion agenda, where we can have everybody, regardless of what they do to sign on to a personal pension scheme?

LS - I think I am very much excited by what People’s Pension Trust is doing, that is its focus on the informal sector to drive financial inclusion. A lot of statistics have been thrown out about the informal sector, which on average is about 80% of the labor force in Ghana.  The major priority for every pension scheme should be the extension of coverage to every worker, so as to promote inclusiveness. This has been a major issue for the pension industry over the years, not only in Ghana but throughout developing economies.

I think we have been able to identify the root causes, which is mainly the way the informal sector is. It is not structured like the formal sector, no proper bookkeeping, the seasonality of some of the activities, the irregularity of incomes are some of the reasons, why it has not been easy to fully rope in the sector. But luckily we live in a changing environment where technology is driving a lot of activities in the pensions industry and which I think companies like PPT are taking advantage of to improve the coverage of the informal sector.

PPT has put in place a lot of mechanisms that do not require members to exert themselves to make payments. Through modern technological systems, contribution payments have been made easier, and its also easier for members to know the status of their contribution at any point in time or claim their benefits anytime they want to, so I will encourage Ghanaian workers out there who do not belong to any pension scheme now to sign on to People’s Pension Trust schemes.

PPT - What advice will you give to Ghanaian workers, especially those in the informal sector?

LS - I think every Ghanaian must belong to some form of social security scheme, given the uncertainties of life. We all must prepare for the unknown, which is why the opportunities provided by the new Pensions Act are laudable. I would therefore advise Ghanaians, especially those who work in the informal sector to sign on to the Third tier schemes wherever they find themselves

I will also encourage those working in the formal sector and already belong to the 1st and 2nd Tier schemes to also sign on to 3rd Tier schemes like the PPT Personal Pension Scheme because what they get from the 1st and 2nd Tiers is related to the salary they earn. So at the end of the day, their pension is based on the salary they earn during their working life. By joining a 3rd tier scheme, they will enjoy an enhanced pension in retirement, then the usual refrain of ‘I worked for several years but my pension is too small will become a thing of the past.

We are profoundly grateful to Mr. Laud Senanu for sharing with us his experience and paving the way for corporate trustees like us to make an impact in the pension sphere, especially in the informal sector.

Pension Weekly - Edition 18 - May 2021


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