Highlights on the Pensions Consumer Protection Policy

Pension contributions in Ghana has received another boost through protection from the newly launched Consumer Protection Policy by the pensions regulator. Consumer protection in pension systems is critical considering its social importance. Private pensions, combining social features due to their increasing role in retirement provision and by nature being long-term financial contracts which involve a series of complex transactions, are not easy to understand and engage with. Individuals joining a pension scheme or concluding a contract with a pension providers are becoming consumers of private pension services and products and these need protection.

OBJECTIVES OF THE POLICY

These directives are to ensure:

• That contributors have access to adequate complaints handling  and redress mechanisms that are accessible, independent, fair, accountable, timely and efficient;

• That the complaint mechanisms do not impose unreasonable cost, cause undue delay or impose a burden on contributors;

• That contributors and members of schemes are protected through the promotion of fair and transparent transactions by service providers;

• The fostering of public confidence and trust in the pension industry and thus promote growth and efficiency in the industry for the benefit of contributors;

• That the public is educated and sensitized on their right to redress in order to promote fairness in the pension industry.

PRINCIPLES

The following principles shall govern Service Providers in their compliance with this directive or policy:

• Honesty

Service Providers shall act honestly, by presenting all terms and information in a clear and accurate manner without any intent to mislead contributors and pensioners.

• Fair Treatment

Service Providers shall not unfairly treat contributors, pensioners, or any other individuals, nor discriminate against them in any way, for presenting complaints to the financial Service Provider, administrators and individuals, or the National Pensions Regulatory Authority.

• Access to Redress

All contributors, pensioners and scheme members shall have access to adequate complaints’ handling and redress mechanisms that are easily accessible, independent, fair, accountable, transparent, timely and efficient.

• Adequate Redress Mechanisms

Service Providers shall offer adequate internal dispute resolution mechanisms.  They shall also have in place appropriate and effective procedures for receiving, considering and resolving complaints as well as for reporting complaints to the Authority. These procedures must be explicit and well documented in a brochure and made easily available to consumers.

FINANCIAL EDUCATION and AWARENESS

Service Providers shall promote the enhancement of contributors’ awareness and provide financial education programmes as part of a wider financial Consumer Protection Policy.

Service Providers shall make sure that financial education programmes are tailored to the needs and capacities of a targeted audience and take into consideration particular types of private pension arrangements.

Service Providers’ websites should serve as one of the primary sources of information and guidance to contributors, while Service Providers remain responsible for the disclosure of the key information on pension services and products.

Service Providers should make continuous efforts to assess, refine and improve the impact of their financial education efforts.

COMPLAINT HANDLING AND RESOLUTION PROCESS

The Three Level Process

The complaint handling and resolution process for a contributor to a pension scheme has three levels:

• Service Provider

First – at the level of the Service Provider: the Service Provider shall establish an internal complaint and redress procedure that shall handle and seek to resolve all initial complaints. Where the parties are unable to arrive at a consensus, the financial Service Provider shall refer the matter to the National Pensions Regulatory Authority in writing within five (5) working days of the stalemate.

• National Pensions Regulatory Authority

Second – at the National Pensions Regulatory Authority: the Authority shall take up all referred unresolved complaints or disputed decisions by the Service Provider and act as Arbitrator through the Adjudication Committee between the parties and give appropriate directives where required.  

• The Courts

Third – at the Court: where a party is dissatisfied with the decision of the National Pensions Regulatory Authority’s Adjudication Committee, the aggrieved party may seek redress in Court by instituting a legal action.