Ghana’s pension scheme experienced a major reform in 2004. In 2006, a Committee was set up to review the scheme. A year later, proposals were sent to the Cabinet who approved a new pension system. The Bill was passed into law and received presidential assent in 2008.

Two major additions were made to the pension law; a tier three pension scheme and a pension regulatory authority were established in the new reform.

The pension regulatory authority was mandated to approve, regulate and monitor all parties involved in the pension scheme. The newly ­introduced third tier contribution is a voluntary provident fund and scheme supported by tax benefit incentives for workers. This is an additional fund which enhances the pension of individuals in the formal sector.

The good news with making the tier three contributions is the fact that it can be used to acquire a mortgage facility in Ghana. How? Jumia House Ghana interviewed a Representative with Petra Trust, a private pension manager in Ghana who provided information on how to acquire a mortgage facility with a tier three pension contribution.

Jumia House Ghana (GH): We understand you can use your tier two pension contribution to acquire a mortgage facility.

Petra Trust (PT): You can take a mortgage facility with a tier three contribution rather. The government has mentioned we can use the tier two but it is yet to submit the guidelines but for now we are not working with the tier two contribution.

GH: What is the process of acquiring the mortgage with one’s tier three pension contributions?

PT: If you have a tier three contribution with us what you do is that you find a mortgage company that will be providing you with the facility. The three parties will sign a contract and when that is done, we will make copies and give one to the mortgage company. After signing the contract, your contribution will belong to the mortgage company, whenever they are ready, they can claim your contribution from us.

GH: How much do you need in your tier three pension in order to qualify for a mortgage?

PT: That depends on the mortgage company. For instance, if they are taking 20,000 and you have 10,000 then what that means is that you need to go and search for the additional balance.

We only work with mortgage companies; you cannot go and get a land somewhere and come for a mortgage.