The government's planned Debt Exchange Program has been rejected by the Chamber of Corporate Trustees.
The Chamber said in a statement that approving the initiative will harm pension system contributors' interests.
In the statement bearing his signature, Thomas Kwesi Esso also urged pension administrators and providers to continue their discussions with the government in an effort to enhance the restructuring's terms.
The idea put out by the Finance Minister, Ken Ofori-Atta, is inadequate to market expectations, the Chamber claims, and it will damage Ghanaians' savings and further erode market confidence.
"This is why we categorically reject it. We let pension fund contributors and other stakeholders to maintain their composure while we work to achieve the best possible result in our talks with the Ministry of Finance.
The Chamber gave its members the reassurance that it has not yet approved the government's debt swap proposal.
A debt swap scheme has been introduced by the government as part of efforts to restructure the nation's debt load.
The goal, according to Finance Minister Ken Ofori-Atta, is to "invite holders of domestic debt to voluntarily exchange approximately GHS137 billion of the domestic notes and bonds of the Republic, including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued by the Republic." This was stated during the program's launch on Monday, December 5, 2022.
In a speech to the nation on October 30, 2022, President Nana Addo Dankwa Akuffo Addo of Ghana promised all Ghanaians that "there will be no haircuts on pension money."
We are all watching, perhaps surprise, a significant U-turn from that viewpoint a few weeks after this declaration.
After carefully examining the Minister of Finance's declaration about the Debt Exchange Program, we believe it is detrimental to the interests of pension plan contributors.
The debt exchange proposal put out by the Ministry of Finance has not received industry support, as the Pensions Chamber would want to reassure pension plan participants.
We have a fiduciary duty as Trustees and are required to always look out for the interests of contributions.
As we continue to work with the government to enhance the conditions of the restructuring, we encourage all pension plan participants to ask their pension providers or administrators for more information.
We acknowledge that this year's inflation has significantly harmed the assets of pension funds and that it is important to lower the level of public debt and bring back macroeconomic stability. But it shouldn't be done at the expense of pension plan contributors.
We support the government's demand for burden sharing, but it must be carried out fairly to benefit all parties involved.
The idea as it has been presented by the minister of finance falls short of market expectations, will obliterate Ghanaians' savings, and further erode market confidence.
The idea as it has been presented by the minister of finance falls short of market expectations, will obliterate Ghanaians' savings, and further erode market confidence.
This is why we categorically reject it. As we seek the best result in our conversations with the Ministry of Finance, we grant donors to pension funds and participants in the pensions sector our indulgence to maintain their composure.
Members will be properly informed on the results of our discussions.