The Trades Union Congress (TUC) has expressed worry about the government's decision to begin its Domestic Debt Exchange scheme without consulting labor unions.
The TUC claims that because the government's scheme might have a detrimental effect on employee pensions, it had serious concerns about it.
The TUC's response came after the government made the decision to rely on a softer payment schedule with organizations and people who have lent money to the nation as part of attempts to lessen the economic burden that the public debt stock has on it.
Given that a sizable amount of employee pensions is invested in government bonds, the union lamented the lack of previous engagement with labor in a statement signed by the TUC Secretary General, Dr. Yaw Baah.
"Due to its potential to have a detrimental effect on employee pensions, the domestic debt exchange (DDX) scheme of the government causes the Trades Union Congress great anxiety. Given that a sizable amount of employee pensions is invested in government bonds, we are equally worried about the absence of prior engagement with labor unions.
Workers are reassured that the TUC and its associate unions would exert every effort to guarantee that their members are completely safeguarded and that no pension funds, not even one pesewa, be lost in the debt restructuring scheme.
Therefore, the TUC urged restraint among its members as it strives to save their pensions.
Therefore, as we battle to defend our retirement savings, "we are calling to all workers and unions to maintain calm," the TUC adds in a statement.
On Monday, December 5, 2022, the government officially inaugurated the Debt Exchange Program in an effort to lessen the nation's debt load.
Ken Ofori-Atta, the minister of finance, made the following remarks when introducing the program:
Domestic bondholders will be requested to swap their current securities for new ones as part of the domestic bonds exchange scheme. Existing domestic bonds will be swapped on December 1, 2022 for a group of four new bonds with maturities in 2027, 2029, 2032, and 2037.
All of these bonds' yearly coupons will be fixed at 0% in 2023, 5% in 2024, and 10% from 2025 until maturity. In accordance with this, treasury bills are totally exempt, and all holders will be compensated for their investments in full when they mature. Individual bond holders won't be impacted, and there won't be any haircuts on bond principal.
"The yearly coupon for each of these bonds will be fixed at 0% in 2023, 5% in 2024, and 10% from 2025 until maturity... Accordingly, treasury bills are totally free from taxes, and all holders will get their whole investment value at maturity. Bond holders individually won't be impacted, and there won't be any haircuts on the principal of bonds.