The Pensions Industry’s Assets Under Management (AUM) saw significant growth, expanding by 33.0% in 2023.
By the close of December 2023, the AUM for Ghana’s Three-Tier Pension Scheme reached GH¢61.8 billion, a substantial rise from GH¢46.6 billion in 2022.
The Financial Stability Review highlighted that pension funds grew by 33.0% in 2023, an increase from the 20% growth observed the previous year. This accelerated growth has been largely attributed to the strong response to an alternative offer made to pension funds, which achieved a high participation rate of about 95.0%. The government’s commitment to honoring its payment obligations under this offer further boosted the sector.
Additionally, government actions such as partially redeeming contributions and intensifying enforcement against employers who default on mandatory pension payments also played a role in driving up the AUM.
Private Pension Fund
Private pension funds were the primary force behind the industry’s growth in 2023.
Total assets under private pension funds expanded by 32.0% for the year, up from a 26.0% increase in 2022. By the end of 2023, private pension funds under management totaled GH¢46.5 billion, a notable rise from GH¢35.3 billion in 2022.
This steady growth is credited to improved investment returns and increased enforcement measures, particularly against employers defaulting on their Tier 2 pension contributions.
Public Pension Funds
Pension funds within the Basic National Social Security Scheme (BNSSS) saw significant growth in 2023, marking a stronger performance than recent years.
The scheme’s assets under management (AUM) rose from GH¢12.11 billion in 2022 to GH¢15.30 billion by the end of 2023, largely due to the government’s payment of outstanding contribution arrears. This growth represented a 26.3% increase for 2023, a substantial improvement over the 4.9% growth recorded in 2022.
SOURCE: JoyBusiness
Join our WhatsApp channel: https://whatsapp.com/channel/0029VakDz4u9RZATWh53yC1a
