The Trades Union Congress (TUC), wants the government to exempt pension funds from its current Debt Exchange Programme (DEP).
According to the TUC, its leadership has analysed the programme and realised its negative impact on its members’ pensions.
It has therefore given the government a one-week ultimatum to exempt all pension funds from the programme.
Speaking at a press conference held in Accra, on Monday, 12 December 2022, the General Secretary of the TUC, Anthony Yaw Baah said: “According to the Minister for Finance, the Domestic Debt Operation, as they call it, involves an exchange for new Ghana Bonds with coupons of longer average maturity.
“Existing Domestic Bonds as of 1st December 2022, will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032, and 2037. Somebody said the government is shifting economic stability to 2037.”
The TUC General Secretary noted that: “The annual coupon on all these new bonds will be set at 0 per cent in 2023, 5 per cent in 2024 and 10 per cent from 2025 until maturity.
“We’re talking about inflation of 40.4 per cent and you’re fixing coupon rates at 0 per cent, 5 per cent and 10 per cent.”
He quizzed: “So if your coupon rate is 5 per cent after 6 months do you know how much they’ll pay you, 2.5 per cent.”
Referring to the TUC’s earlier press statement rejecting the government’s debt exchange programme, the TUC General-Secretary stressed that upon a thorough analysis of the programme, the leadership of the union spotted some deficiencies.
“The programme will negatively affect pension funds of our members and consequently, their retirement income security. Already, pension is low and we will have thought that our government will do everything to protect even the small pension that we have, instead, they are introducing programmes inspired by IMF, to cut further, pension incomes and as we used to say, ‘We no go sit down,’ the TUC General-Secretary stated.
The General Secretary continued that: “The TUC and all our affiliates, have decided and this is a very firm decision that the pension fund of our members will not be part of the domestic debt exchange programme.”
He disclosed that the union haS sent a letter to the Minister of Finance to demand that: “All pension funds invested in government bonds should be exempted entirely from the debt exchange programme.
“Within one week from today, government should publicly announce that all pension funds including SSNIT are exempted from the debt exchange programme.”
He added: “If government fails to accede to our demand, within one week, we’ll advice ourselves.”