If the government doesn’t pay pensions on time, the Civil and Local Government Staff Association of Ghana (CLOGSAG) has threatened an ongoing strike.
“CLOGSAG is filing notice to the National Labour Commission that, should the Government lapse in honoring any of the coupons, when due for the schemes, it would announce an indefinite nationwide strike,” said Mr. Isaac Bampoe Addo, Executive Secretary.
He made this statement on Thursday during a news conference in Accra as the government began a domestic debt exchange program in which bondholders would trade in their securities for new ones.
A set of four new bonds with maturities in 2027, 2029, 2032, and 2037 would be exchanged for the existing domestic bonds as of December 1, 2022, under this agreement.
Additionally, all of these new bonds would have semi-annual coupons with yearly rates of 0% in 2023, 5% in 2024, and 10% from 2025 until maturity.
Mr. Bampoe Addo warned the Government not to default in fulfilling any of the coupons when due in light of this development and its possible effects on the financial sector, especially pension funds.
He requested that the Government uphold its commitment, citing Section 98 of the Pensions Act, which declared that pension funds were to be considered as individual contributions, and the Finance Minister’s declaration that individual bondholders were excluded.
Mr. Addo stated, “Pension money cannot be used for the Domestic Debt Exchange Program in accordance with Section 102 on safeguarding of accrued benefits.”
He continued, “CLOGSAG would desire to call the Government’s attention to these critical provisions in the National Pensions Act 2008 (Act 766) if they had escaped the Government.
Mr. Addo pleaded with every member to remain composed, carry out their regular responsibilities, and continue to support Ghana’s strong administration.