Management Of Pension Schemes-GNAT shows the way with the Teachers Fund


The issue of Pensions has dominated the news in recent times. The argument about the subject has been whether or not the Ghanaian Labour force can effectively and efficiently manage the tier-2 pension funds or contributions themselves. The arguments and counter arguments vis-à-vis the three tier Pension law set my mind thinking and wondering which best examples in terms of management of pension funds I can point to and make a case for Labour.  The truth is that I do not want to use examples from the west- a practice we all are guilty of.  At the least provocation we are quick to draw comparisons with what transpires in the western world when in fact we can look for unique success stories peculiar to our situations several of which abound in Ghana to buttress our points. Even with the current debate over the tier-2 Pensions scheme, I have heard references being made to Norway.  This is a far cry from what we all expect our leaders to do.

I believe strongly that we need not travel far in looking for a success story in terms of pensions managed privately or by an Association, something Labour is advocating for at this moment.


And indeed the Teachers Fund of GNAT is a clear example of the success of an Association managed Pension fund or scheme we can point to. The Teachers Fund is today valued at over Three Hundred Million Ghana cedis (GH300m) represented by investments in treasury bills, bonds, listed equities, private placements, loans and facilities to members, real estate projects and other investment portfolio. The target is to grow the fund to One billion cedis by the year 2018 when the Fund will be celebrating its 20th anniversary. At the current growth rate of the Fund, members are making as much as 85% returns on their contributions to the Fund. What more would one be looking for. This situation is attributable to prudent management decisions backed by an effective and efficient Board of Trustees that is ensuring that contributors to the Teachers  Fund retire and retire well when they are no longer in active service.

Here are a few of the contributions that the Fund has made to the socio-economic development of Ghana while taking into account the welfare of contributors or members.

The Fund’s investments in the educational and Real Estate of Properties sector of the Ghanaian economy have seen the construction of a one thousand-bed capacity hostel at the University of Ghana. On the Independence Avenue in Accra,  lies a huge eight-storey Office complex which houses several business entities. These investments have ensured that for instance in education, at least One thousand students can have a place to lay their heads every semester and study in comfort. Business entities can also find comfortable office space to transact business which in the long run inures to the benefit of the nation as their continuous existence guarantees payment of tax and employment generation for the economic growth of Ghana. The Fund can also be found in the real estate sector answering the housing needs of Ghanaians particularly teachers. These are just a few of the investments and contributions made by the Fund to improve the lives of its members and also contribute significantly to the growth and development of Ghana. Such is the success story of the Teachers Fund so far. With just these few stories, it is also important to find out how the Fund started. And this is where the story starts.  

The story of the Fund started in 1998, when the Ghana National Association of Teachers (GNAT) in recognizing the need to improve the lifestyle of its members especially when they retire from active service, mooted the idea of a Mutual Fund for its members. The major objective is for it to serve as a Retirement Supplement for contributors.   Eventually in May of that year, the FUND was established by a Trust Deed. The Fund is governed by a fifteen member Board of Trustees made up of ten regional representatives of GNAT, one from each region, two executive members of the National Council of GNAT and Three non-members of GNAT.

The regional representatives are teachers from the ten regions of the country. These individuals are nominated by members of GNAT at the regional level to represent them on the Board and they are recognized as ex- officio members of Regional Executive Committees of GNAT. They report regularly to their constituents on the Fund's operations and get their views reflected on the policy direction of the Fund. GNAT further appoints three external Board members to the Board of Trustees by virtue of their expertise in matters relating to Fund
Management. The National Council of GNAT is represented on the Board by two of its Executive Officers. The Chairman of the Board of Trustees is selected by the National Council of GNAT. The Board Chairman presents an annual report on the operations and activities of the Teachers Fund to the National Council of GNAT yearly. Apart from the Board of Trustees, the Fund has a secretariat manned by professionals who see to the day to day administration of the Fund.

Sixteen years in operations has seen the Fund birthing three (3) other subsidiaries- Credit Mall, TF Financial Services and TF Properties. Members the Fund enjoy different facilities from the various subsidiaries. For instance the Fund offers members the opportunity to access Personal Loans for their personal needs at a minimal interest rate of 21%. There is also the Investment Capital Loan that can be accessed to finance any business ideas of a member and sometimes they form co-operatives to access the loan for investment purposes. Habitat Loan gives members the opportunity to complete their building and the Auto or Vehicle loan that affords members the opportunity to own cars. A larger number of members of the Fund have taken advantage of these opportunities to enhance their lifestyles by accessing the various facilities at their disposal.

Members of the Fund can purchase home appliances on credit courtesy of Credit Mall a subsidiary of the Fund. The FUND seeks to address the accommodation needs of members by providing housing and accommodation facilities to interested members. It is also involved in the construction and rental of hostel facilities and office accommodation. It is noteworthy that every initiative or activity carried out by the FUND is expected to fulfill its primary objective which involves providing contributors with a Retirement Supplement package. In line with this, the loans and facilities offered to contributors, the operations of the Credit Mall Limited and the Real Estate venture are all expected to generate profits which are distributed to members as returns on their investments. A lot has changed for GNAT members since the birth of the Teachers Fund. Testimonies from contributors who are still active in the service and those who have retired, points to the fact that it was a decision worth the while.  The Teachers Fund is the second largest pension scheme currently operating in Ghana apart from SSNIT with over One Hundred and Seventy Thousand contributors. It started with a monthly deduction of GH₵0.10 (₵1,000.00) as basic contributions from the salary of GNAT members and today, the basic minimum contribution is GH₵20. There are other categories of contributors referred to as optional contributors who contribute more than the basic minimum requirement.

One cannot talk about the Teachers Fund without acknowledging the pivotal role played by the national executives of the Ghana National Association of Teachers, GNAT to get the Fund operational. Obviously, it is the love and concern GNAT has for the welfare of its members that led it to set up the Fund. My  admiration for GNAT stems from the fact that long before our country’s political leaders decided to introduce the tier-2 and 3 pension schemes, GNAT had gone ahead to start operating or managing a scheme akin to the  Tier-3 scheme. This is the mark of visionary leadership backed by the support of the entire following. The milestone of achievements by the Fund is only surpassed by SSNIT. The future can only get better for the Fund and its members. Kudos GNAT, as teachers, may you continue to show us the way.