Learning from the sorry experiences of of past legislators, Ghanaian Members of Parliament (MPs) have taken a bold step to safeguard retirement.
The MPs were united in their resolve on the urgent need for the establishment of a pensions scheme for to carter for their welfare.
This follows a statement made by the Majority leader, Mahama Ayariga tabling a motion for the venture.
According to him the move is a “necessary step to ensure that those who have dedicated their lives to public service are taken care of”.
Mr Ayariga who is also the MP for Bawk Central said a pensions scheme for lawmakers will help promote transparency and accountability, rduce corruption, and attract and retain top talent to the lawmaking chamber.
The full statement is published below:
STATEMENT ON THE ESTABLISHMENT OF A PENSION SCHEME FOR RETIRED PARLIAMENTARIANS IN GHANA Made by Mahama , Ayariga, MP, Majority Leader & Leader of Government Business, Parliament of Ghana29th January 2025.
Rt Honourable Speaker,
Honorable members of parliament,
Since assuming office a week ago, my immediate attention has been on how to contribute towards the efforts of my predecessors and our Rt Hon Speaker Sumana Alban Kingsford Bagbin to strengthen the institution of parliament by addressing the anxieties and concerns of members of parliament when they fail to be reelected or voluntarily decide not run for office again.
An institution is as strong as the individuals who populate that institution. Parliamentarians who know they are well catered for when they retire will be difficult to bribe and improperly influence. They can devote their attention to work and put up their best for their constituents and country. They will make Ghana great again. They can more adequately resist pressures from lobbyists and certain interest groups.
This proposal is therefore not a self-serving piece, but rather a necessary step to ensure that those who have dedicated their lives to public service are taken care of in their golden years and Ghanaians get the best out of their parliaments.
Public service is a noble calling that requires sacrifice, dedication, and hard work. Parliamentarians put in long hours, often at the expense of their personal and family lives, to serve the nation. It is only fair that we recognize their contributions and provide for their well-being in retirement.
The current mechanisms in our constitution do not clearly provide for a pension. And the Committee on emoluments usually treats the services of Members of Parliament as a simple 4 years contract with the people. However, some parliamentarians have served for more than 20 or 24 years and still sitting here in this chamber. After 24 years sitting in this chamber, they will leave without a pension befitting their status and the work they have done for their country.
The perception out there is that parliamentarians are well to do. It is unfortunately not the case in majority of the instances. Many parliamentarians come from diverse backgrounds and may not have had the opportunity to build a significant retirement nest egg. Without a pension scheme, they may face financial uncertainty in retirement, which can be a source of stress and anxiety and vulnerability. This will translate into a national vulnerability given where they sit and the approvals that must come from them.
A pension scheme would provide them with a predictable income stream, allowing them to live with dignity and security when they leave Parliament. They can better resist temptation.
Many countries have pension schemes for their lawmakers, recognizing the importance of attracting and retaining top talent in public service. By implementing a similar scheme, we can demonstrate our commitment to attracting top talents into parliament and supporting those who serve the nation.
In conclusion, a pension scheme for parliamentarians is not only a moral imperative but also a necessary step to ensure that those who have dedicated their lives to public service are taken care of. I urge my fellow parliamentarians to support this proposal and work towards creating a more independent minded parliamentarian.
A pension scheme for parliamentarians can help fight corruption in several ways. Firstly, it can reduce the temptation for parliamentarians to engage in corrupt practices to supplement their income.
When parliamentarians are financially secure, they are less likely to be swayed by bribes or other forms of corruption.
Secondly, a pension scheme can help to promote transparency and accountability in government. By providing a transparent and predictable source of income for parliamentarians when they retire, a pension scheme can help to reduce the opportunities for corruption and increase the accountability of parliamentarians to the public.
Finally, a pension scheme can help to attract and retain top talent in the parliament. By providing a competitive and secure source of income, a pension scheme can help to attract highly qualified and experienced individuals to serve in the parliament, which can help to reduce corruption and improve governance.
It’s worth noting that, while a pension scheme can be a useful tool in the fight against corruption, it is only one part of a broader strategy. Other measures, such as increasing transparency and accountability, strengthening institutions, and promoting a culture of integrity, are also essential to reducing corruption.
Let me refer you to best practices in an old established parliament. The pension scheme for British parliamentarians is known as the Parliamentary Pension Scheme.
Here are some key features of the scheme:
- The British Parliamentary Pension Scheme is a defined benefit pension scheme, which means that the pension paid out is based on a formula related to the member’s salary and service, rather than the performance of investments.
- All members of the UK Parliament, including members of the House of Commons and the House of Lords, are eligible to join the scheme.
- The accrual rate for the scheme is 1/50th of final salary for each year of service.
- The normal pension age for the scheme is 65, although members can choose to retire earlier or later.
- The scheme provides a range of benefits, including:
- A tax-free lump sum on retirement
- A taxable pension payable for life
- A pension for spouses or civil partners
- A pension for dependent children
- The scheme is funded by a combination of employer contributions (made by the UK Parliament) and member contributions.
- The scheme is governed by the Parliamentary Pension Scheme Advisory Committee, which includes representatives from the UK Parliament and the scheme’s members.
It’s worth noting that the Parliamentary Pension Scheme has undergone changes over the years, and the benefits and rules may vary depending on when a member joined the scheme.
Let me bring you closer to home and look around the African continent. The pension scheme for Kenyan parliamentarians is governed by the Pensions Act (Cap.189) and other related Acts of Parliament. The scheme is designed to provide financial security to parliamentarians after they retire from service.
The scheme is open to all members of the Kenyan Parliament, including those in the National Assembly and the Senate.
The scheme provides a range of benefits, including pensions, gratuities, and other allowances.
The scheme is administered by the Pensions Department, which is responsible for the payment of pensions and other related benefits to eligible parliamentarians.
The Kenyan scheme is funded by the Government of Kenya, with contributions made by the employer (the Government) and the employee (the parliamentarian).
The key innovation in the proposed Ghana Parliamentarians Pension scheme is that we will rely on an innovative funding mechanism so that the people who elected us are not burdened beyond what they pay for every public service worker.
We propose to fund our pension from Carbon credit revenues. Carbon credits are financial instruments where the buyer pays another company or country to take some action to reduce its greenhouse gas emissions, and the buyer gets credit for the reduction.
Here’s a possible framework:
We will enhance expeditiously the establishment of an efficient and functioning carbon credit scheme in Ghana.
The scheme will allow Ghana to generate carbon credits from projects that reduce greenhouse gas emissions.
These projects can generate carbon credits. They include afforestation, reforestation, renewable energy, or energy efficiency projects.
We will strengthen the mechanisms for selling the carbon credits generated in Ghana on the international market, such as the United Nations’ Clean Development Mechanism (CDM) or the Voluntary Carbon Market.
A percentage of the revenues will then be allocated to the Parliamentarians’ Pensions.
The allocated revenues could be invested in a diversified portfolio to generate returns to further expand the quantum. An investment policy will guide that. Regular reports will be provided.
Using Carbon Credit Revenues to Fund Parliamentarians’ Pensions is beneficial for several reasons. It is a sustainable source. It takes away the burden from tax payers. It will make parliamentarians focus on environmental sustainability in every facet of our lives. It will incentivize parliamentarians to invest effort and time on emission-reduction projects.
Even though there challenges such as the fluctuations in carbon credit prices which can affect the revenue generated, and there are many international regulations that must be complied with and requirements of transparency and accountability, we believe that this mechanism to fund pensions of retired MPs will work adequately.
When the pensions of parliamentarians begins to depend on carbon credits I believe we will be ushering Ghana into a new era of environmental sustainability where MPs and ex MPs will be the chief advocates for
1. Developing and passing laws that promote climate change mitigation and adaptation, such as carbon pricing, renewable energy targets, and green financing.
2. Reviewing and amending existing laws to ensure they align with the country's climate change goals and support emission-reduction projects.
3. Offering incentives, such as tax breaks, subsidies, or grants, to encourage businesses and individuals to invest in emission-reduction projects.
4. Encouraging the development and use of renewable energy sources, such as solar, wind, and hydroelectric power.
5. Promoting energy-efficient practices and technologies in buildings, industries, and transportation.
6. Encouraging sustainable land use practices, such as reforestation, afforestation, and agroforestry.
7. Investing in climate-resilient infrastructure, such as sea walls, green roofs, and flood-resistant construction.I recall previous efforts to develop a carbon credit framework for Ghana and pass legislation for implementation. Basing MPs pension to carbon credit revenues will see an expedited action to develop the national carbon credit framework and legislation to that effect.
On that glorious note Mr Speaker, with your leave and the leave of the House I move that That This House Sets Up a Committee to Consider Proposals for the Setting up of a Pension Scheme for All Retired Parliamentarians based on Financing from Carbon Credit Revenues and other Sources Not Based Mainly on Tax Payer Financing.
