3 Financial Reasons New Retirees For Next 15 Years Will Regret Their Life In Ghana [Forget even the haircut]

3 Financial Reasons New Retirees For Next 15 Years Will Regret Their Life In Ghana [Forget even the haircut]

1. New retirees for the next fifteen (15) years in Ghana will have worse financial experience, probably more than those who retired in the past fifteen (15).

2. The government of Ghana has recently announced plans to restructure the bond market in the country, which is popularly being called a haircut.

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3. The haircut, which includes a freeze on yields for the year 2023 has other measures like a cap on interest to be paid for the next ten (10) years.

4. Though labour unions which have hugely invested the pension fund contributions of their members in the bond market are up in arms against the financial haircut, the government seems to be unperturbed or probably have no choice.

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5. As if such bond restructuring which will definitely affect pensioners greatly is not enough, below are the three (3) financial reasons new retirees would regret their pension life.

a. It is a public secret now that pension contributions by workers are not being paid on time to their fund managers. It has been disclosed by labour unions that members’ contributions have been in arrears for the past six (6) months and have continued to be so and probably being seen as normal. The inference is that for every year, your pension contributions are not invested for six (6) months. You can do the maths.

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b. The labour unions and financial experts are speaking about the dire consequences of the haircut of pension funds invested in the bond market on pensioners. The worst part is that there is no other place for even new pension contributions to be invested. So, the point is, while existing funds are receiving a haircut, new contributions must go into the same barbering shop bond market for the same haircut.

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c. Probably the worst part is the rate of inflation in the country. While there is no other place to invest except the barbering shop bond market and pension contributions are in arrears, the rate of inflation, which is currently around 50.3%, means a nail in the coffin for the new retirees. Even the little they receive will become meagre in the market.

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