Pension concepts
You do not need to be a pensions expert to use Onyx, but the system is easier to follow if you know how the pieces fit together.
The three tiers
Section titled “The three tiers”Ghana’s pension system under Act 766 (as amended by Act 883) has three tiers:
| Tier | What it is | Who runs it |
|---|---|---|
| Tier 1 | Mandatory basic national social security | SSNIT |
| Tier 2 | Mandatory occupational scheme | A private trustee, the user of Onyx |
| Tier 3 | Voluntary: provident funds and personal pensions | A private trustee |
Onyx administers Tier 2 and Tier 3. Tier 1 is outside it.
Schemes and funds
Section titled “Schemes and funds”A scheme is a pension arrangement with its own rules: its contribution rules, its retirement and withdrawal terms, and the funds it offers. Onyx supports three kinds: a Tier 2 scheme, a Tier 3 personal pension, and a Tier 3 provident fund. A provident fund can belong to a single employer.
A fund is a pool of investments inside a scheme. A scheme can have more than one, so a member can be in a cautious fund or a growth fund. The fund manager invests the money and a custodian holds the assets.
Units and unit prices
Section titled “Units and unit prices”Members do not own cash balances. They own units in a fund, the way an investor owns units in a unit trust.
- When a contribution is accepted, it is bought into units at the fund’s price on the day.
- The unit price is the fund’s net asset value (NAV) divided by the units in issue. It is set when the fund is valued, on the schedule the scheme has chosen (monthly or quarterly).
- A member’s balance is their units multiplied by the latest unit price.
Prices are locked once published. A mistake is corrected by a restatement, which never overwrites the original price.
Contributions
Section titled “Contributions”A contribution is money paid into a member’s account. The employer normally pays it, sometimes on the employee’s behalf. Each contribution has a type, mandatory, voluntary or transfer, and a status: pending, posted or reversed.
Employers send contributions in bulk. Onyx checks each line, for example against the employee’s basic salary, and flags lines that look wrong for staff to review. The percentages that apply and how they are checked are in the business rules section.
Benefits
Section titled “Benefits”A benefit claim is a request for money to leave a member’s account. The types are:
- retirement, from the scheme’s normal retirement age (60 under the Act);
- early retirement, from age 55;
- total and permanent incapacity;
- death, paid to the beneficiaries on the register;
- permanent emigration;
- withdrawal, from a Tier 3 scheme where its rules allow it;
- transfer out, to another scheme.
Every claim is checked and then approved by a second person: the four-eyes rule. Tier 2 pays a lump sum. Tier 3 benefits can be affected by vesting: withdrawing before the vesting period has been served can lose the tax relief.
Employers and forfeiture
Section titled “Employers and forfeiture”If a member leaves before they have vested, part of the employer’s contribution may not be payable to them. That amount is forfeited. It stays in the fund but belongs to the employer, who decides how it is used and records the reason.
What Onyx adds around this
Section titled “What Onyx adds around this”Alongside the pension rules, Onyx handles the surrounding work: matching bank statements, charging fees, keeping a general ledger, checking investment limits and producing the returns the regulator requires.
The figures in these pages follow the National Pensions Act and common Ghanaian scheme practice. Each scheme’s own rules, as set by the trustee, take precedence.