4 Ways GNAT Mutual Fund And Members Will Suffer Debt Restructuring Greatly [Apply to other mutual funds of other labour unions]

4 Ways GNAT Mutual Fund And Members Will Suffer Debt Restructuring Greatly [Apply to other mutual funds of other labour unions]

Teaser: The duration of receiving your loans will be longer or the loan may never come.

Highlights

1. The government of Ghana has decided to introduce a domestic debt restructuring program that affects pension funds and got labour agitated and gearing up for a nationwide strike by all government workers.

2. Though the immediate concern of labour is to protect the pension funds of retiring members, there is a second effect that will bear on mutual fund schemes being run by various labour unions.

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3. Some of the mutual funds being run by labour unions are:

a. GNAT mutual fund for the Ghana National Association of Teachers

b. CCT-Gh Mutual Fund is run by the Coalition of Concerned Teachers, Ghana

c. NAGRAT mutual fund is run by the National Association of Graduate Teachers.

d. GRNMA mutual fund is run by Ghana Registered Nurses and Midwives Association.

e. And others

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4. The domestic debt restructuring which put some freeze (interest payments and capital withdrawal) on the bonds purchased by various institutional investors, including the mutual funds being run by labour unions, is expected to have the following effects on the various mutual funds

a. The inability to access funds invested in the bonds, which can not be withdrawn or with no interest, means the mutual funds will have their liquidity badly affected. The net effect will be that loan requests can not be disbursed early like before.

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b. Also, no or less interest on the bonds below inflation for the next ten (10) years means the pension value members expected from their lifelong contributions will be reduced to insignificant amounts.

c. In addition, refunds for members who exit any of the mutual funds may take ages to arrive.

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d. Finally, refunds due to loan re-finance may be equally delayed due to the cash trap the funds may find themselves.

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