The Merchant Bank Allegations – How Ghana’s Mahama led administration is helping fleece his people

President of Ghana

Mr. Mahama’s government since 2012 when he took over the unfinished term of later Prof. Atta-Mills has found itself in countless issues of corruption. He has promised to deal with the issue and has fixed 16th December to release names of people indicted.


There are serious allegations that the Bank of Ghana has made some of the Temporary Pension Fund Account (TPFA), Tier 2 PENSION funds being held at BoG) to Fortiz to purchase Merchant Bank. The TPFA would have accrued Ghs 1.3bn in the past three years that it had not been remitted to contributors’ Corporate Trustees. There are common denominators in the Fortiz-Merchant Bank saga and the TPFA. Mr. Mawuli Hedo is a Director of Both Fortiz and First Bank, the Scheme Administrators of the Temporary Pension Fund Account being held at the Bank of Ghana. Obviously, another interesting common denominator in all this is the Bank of Ghana itself. They are once Custodial Bank holding the TPFA. Is it true that they have made the TPFA available to Fortiz in their quest to purchase Merchant Bank? Doesn’t the Ghanaian pension contributor have the right to know?

Alas, the state’s Social Security and National Insurance Trust (SSNIT) is another common denominator. SSNIT has been the collection vehicle of the Tier 2 since January 2010 when the implementation of the three-tiered pension system started. This they did till October 2012 – for some companies. All companies that have yet to select a licensed trustee to run their Tier 2 contributions still pay to SSNIT. Again, SSNIT is the majority shareholder of Merchant Bank. The more one knows, the clearer it looks what exactly is happening. 

Though NPRA indicated that it was going to invest TPFA in Treasury Bills pending the registration of Pension Schemes, provisional statements released by NPRA in October 2012 indicated a return on investment of 2.75% per annum. This is disappointing given that the average Treasure Bill returns between January 2010 and October 2012 is around 15% per annum. Additionally the same provisional statement covered a period of 18months instead of the 34 months period (January 2010 to October 2012) over which contributions had been made into the TPFA.

The NPRA did indicate, in their Public Notice on their website in October 2012 that accrued benefits and contributions paid into the TPFA would be remitted to Trustees chosen by employers, starting January 2013. This has not happened up till now.

One of the serious implications of this situation is that people who were 54 years and younger when implementation started in January 2010 WILL NOT get the full value of their lump-sum benefits, upon retirement at 60. Thus all Ghanaian workers – both private sector or public sector workers – who were 54 years old or younger as at January 2010 will not get their full lump-sum benefits from Tier 2 Pension Schemes as NPRA is still holding on to 34 months of workers contributions and accrued benefits. There is no word from the National Pensions Regulatory Authority as to when these funds will be paid to the contributors or even how it will be paid. 


In September 2009, the Board of the National Pensions Regulatory Authority (NPRA) was set up to oversee the implementation of the National Pensions Act, 2008 (Act 766). The Act seeks to create a unified pension system under a three tiered pension structure, with SSNIT as the manager of the First Tier, and Approved Trustees (Corporate & Individual Trustees) as operators of the mandatory Tier 2 and Voluntary Tier 3 schemes. 

In January 2010, the Temporary Pension Fund Account (TPFA) was set up to provisionally administer Tier 2 contributions pending the licensing of Trustees and the registering of Pension Schemes. Employers, from January 2010, remitted 5% (Tier 2 contributions) of their employees’ salaries to the TPFA. This continued for most employers till October 2012. First Bank was appointed by to be the Administrators of the TPFA, with Bank of Ghana serving as the Custodial Bank. NPRA itself, acting ultra-vires of the Pensions Law, acted as the Fund Managers of the TPFA.

In October 2011, the NPRA issued the needed administrative guidelines to make way for the full implementation of the Act. Private companies – Corporate Trustees, Fund Managers and Pension Fund Custodians – purposely established to fully administer the Tiers 2 and 3 schemes were licensed by the NPRA on March 16, 2012. 

The NPRA finally, after almost 3 year wait without much information to workers and service providers, registered Pensions Schemes at the end of October 2012. Full implementation under of the reforms – Act 766 – thus started in November 2012.

What the Law Says
Section 218(4) says that the Board of NPRA shall within 90 days of licensing Pension Fund Managers, Pension Fund Custodians and Trustees, compute and transfer the accrued contributions and returns in the TPFA to Occupational Pension Funds opened by Trustees of employers’ choice and registered by NPRA. Pension Fund Managers, Pension Fund Custodians and Trustees have been licensed since March 16th 2012, over 18 months now, and yet it took the NPRA till end if October 2012 to register Schemes. The NPRA has not complied with Section 218(4).

Conclusion and Recommendation 
With everything going on, we recommend that:

1. All activities of the TPFA should be audited by an external auditor.
2. Accrued contributions in the TPFA should be transferred into registered Tier 2 Pension Schemes selected by the various employers.
3. Bank of Ghana should submit a report on its stewardship of the TPFA.

Editors’ Note: This alert is from the IMANI Centre for Policy and Education. I am not able to verify their source or the authenticity of their claims but if their reputation is anything to go by, this story should be true. You can contact IMANI concerning this story via their website.

IMANI Center for Policy and Education is a Ghana-based think-tank and research institute dedicated to the promotion of the institutions of a free society throughout Africa.

The organisation’s mission is simply to subject any government  policy that is likely to have systematic implications for development to basic ‘value for money’, ‘due diligence’ and ‘rational choice’, ‘public choice’ and ‘vested interests’ analysis and then actively engage in public advocacy to publicise the results, with a view to promoting peace and prosperity through human flourishing.

IMANI has been consistently ranked among the top 10 think tanks in Africa and among the top 100 worldwide, out of a pool of nearly 10,000 organisations by the prestigious University of Pennsylvania, which ranks the world’s largest and most prestigious think tank research program.


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