DOMESTIC DEBT EXCHANGE PROGRAM AND IMPACT ON PENSION

16th January 2023 
To All Participating Members 
NBC Ghana Schemes

DOMESTIC DEBT EXCHANGE PROGRAM AND IMPACT ON PENSIONS

We trust you are keeping safe and welcome back from your holidays.

Pursuant to the Government of Ghana (GOG) announcement on 5th December 2022 to commence a Domestic Debt Exchange Program for all eligible bond holders; GOG consequently requested investors to complete a Memorandum of Understanding before 19th December 2022 which was subsequently extended to January 16, 2023. We wish to give you update on the debt exchange program as a stakeholder on our registered schemes.

1. The debt exchange program is being proposed for acceptance by eligible bond holders in exchange for a new bond. The exchange program according to the press release on December 5, 2022 is to address the country’s ongoing economic crisis.

2. As Corporate Trustees, we hold over 70% of our total pension funds in government bonds and this is in total compliance to the investment guidelines as issued by the regulator of pensions. This means that the current exchange program when approved will affect 70% – 75% of our total fund value and consequently affect members fund value under the schemes.

3. However, in a Memorandum of Understanding dated 22nd December 2022 and signed by Ministry of Employment and Labour Relations, the Minister for Finance, and the Secretary General of the Trade and Union Congress states that “Government will grant exemption to all pension funds in the DDE Programme”. Thus, Pension funds should expect to receive coupons and maturity payments in accordance with the original terms.

4. We would like to bring to your notice that the current climate, however, presents some challenges for the market of investments for pensions and uncertainties on cash for running the fund.

5. Nonetheless, as Trustees, we hold a fiduciary responsibility and regardless, are required to always seek the best interest of contributors.

6. We would like to assure you that your contributions and benefits under the registered pension schemes shall continue to be held in trust and managed strictly in compliance with the Act 766 and any guidelines as issued by the regulator.

We shall continue to monitor these developments as they unfold and update you of any challenges.