FAQs

By making pre-tax contribution from payroll.

Ask follow up question:

1. Are you currently contributing to a tier 3 scheme? (Those are typically set up by your employer)
2. To benefit from the tax advantage, you need to complete a savings booster application form, and on the form you will indicate that you want deductions to be made from payroll. This allows youto make contributions before taxes are applied to your salary.

You have to provide us with a contact person from your payroll department who we can contact to make your deductions on your behalf and also explain the provision in the pension law that authenticates the pre-tax contributions. Section 115 of the Pensions Act 766 outlines the following;

Duty of employer in respect of personal pension scheme Pensions Act 766, Section 115.

Despite the provisions of any governing rules or an agreement, an employer Shall:

a) Provide the administrative and accounting services required to enable a worker join and contribute to a personal pension scheme of the employee’s choice;

(b) Make appropriate payroll deductions from the monthly salary of a worker who desires to contribute to a personal pension scheme and remit the contributions to the approved trustee of the scheme within fourteen days after the end of the month of deduction; and

(c) Not mingle payroll deductions with the employer’s own funds and where an employer deducts contributions from the salary of a worker the contributions shall be held by the employer in trust until it is remitted to the appropriate approved trustee.

Yes, we charge fees for the services we provide. TheNational Pensions Regulatory Authority (NPRA)has indicated a fee of 2.5% of net asset under management per annum, but Petra Trust charges 2% per annum. This fee is shared amongst us; the custodian who keeps the assets safe and secure; the fund manager who makes sure you are getting good returns and the NPRA, who regulates our activities.The NPRA ensures that nobody gets overcharged and we are complying with the provisions of the pension law.

Petra Trust is a trustee company licensed and regulated by the NPRA. The pension law has provided structures which are enforced by the NPRA to ensure the funds of all contributors are secure. We are your trustees however; you do not payyour contributions directly to us. Your contributions will be paid directly into the scheme through the custodian which is a top tier bank licensed by the Bank of Ghana to be a bank as well as the Securities and Exchange Commission and the NPRA to be a custodian of your contributions.

The Bank for this scheme is Stanbic Bank. Because we are your record keepers, we send you quarterly statements andgrant you access to an online account where you can track your contributions and view your balance at your convenience. Should anything happen to Petra you would go to the NPRA (the regulator) with your certificate and statement.NPRA will take over our schemes and appoint a different Trustee to continue the management of the Scheme, at which point you can demand payment.

This is a new experience which is intended to cultivate the interest/habit of long term savings in individuals hence the name Savings Booster evolving from Personal Pension Scheme.

Yes it is, according to Section 112 of the Pensions Act 766;

Tax reliefs

(1) Subject to this Act, contributions made by an employer to a provident fund scheme on behalf of a contributor shall be treated as part of the deductible income for that employer for a tax year for the purpose of income tax.

(2) Contributions not exceeding sixteen and one half per centum of a contributor’s monthly income, made by either a contributor or the contributor’s employer or both shall, be treated as deductible income, for the purpose of income tax for the contributor and the contributor’s employer to the extent of their respective contributions.

To enjoy the tax exemptions, contributions should not exceed 16.5% of contributors’ monthly income. In the case where your contribution is more than 16.5% of your monthly income, income tax will be charged on the excess contributions.

This is more than just your basic salary. If you enjoy allowances it would include that as well.

As much as we are enjoying tax exemptions, the goal is long-term savings. Although the benefits are accessible anytime, to enjoy the money tax free, you need to keep your funds in the scheme for at least 10years. If you have to make a withdrawal before the 10 year tax exemption period, we will have to withhold 15% of the amount you are taking out and pay it to the Ghana Revenue Authority on your behalf. However, keep in mind that there are alternatives, for instance instead of taking the money out early, you can use what you have to secure a loan -if you need any help, we are here to assist you.

Savings Booster is like a tier 3 scheme set up for individuals – it is invested in the same asset classes as a Tier 3 scheme. Some of the investments approved by NPRA are Treasuries, Fixed Deposits, Corporate bonds, Government bonds etc.

1. By the regulations these are the asset class limits-

• Government bills/bonds – 75%
• Money markets instruments – 35%
• Corporate bonds – 30%
• Stock – 10%

There is no minimum deposit amount when it comes to opening the account or making contributions.

Yes that is possible, kindly note that the tax exemption covers up to 16.5% of monthly income i.e. contributions to PF and SB should add up to 16.5% if contributions will be made pre-tax. Otherwise post tax is an option to contribute to the Savings Booster account.

Yes, it is possible to make both Pre Tax and Post Tax contributions at the same time. However, you need to let us know how much of your contribution should be treated as pre-tax and how much should be treated as post tax. The pre-tax and the post-taxcontributions are processed separately because of the tax implications if you are withdrawing before 10 years.

You have to indicate on the redemption form whether you want to make a withdrawal from your pre-tax contributions or your post tax contributions.

Savings Booster is set up as an individual account. However you can set up an account for an individual (spouse, child, mother etc.) and make contributions on their behalf.

You only complete a redemption form and submit with a valid national ID either in hardcopy or via email; forms received after 3pm are processed the following day. Your request will be processed within 48 hours upon receipt of all correct information – a closed cheque will be issued or instruction sent to your bank to credit your bank account; we will notify you once we complete processing.

We do not encourage the closure of accounts because we want to help you save, but customers may request for 100% redemption of contributions and benefits at any time.

In case you change jobs, you need to provide us with the details of your new employer to enable us contact them to continue making contributions on your behalf.

In the case of redundancy, you may opt to make post tax contributions. However, if the funds are not readily available we will keep investing your funds (you will continue to receive your statements and view your benefits online) until you are ready to start contributing again.

You are to keep your funds in the scheme for 10 years

Yes, you can.

You need to submit an agreement signed by you, the lender and Petra instructing us to place a lien on all/a part of your benefits in respect of your obligation to the lender.

We will then place a lien on your account until you complete payment; otherwise it is only the lender who can request for withdrawal of the funds from the account in the event of default.

You need to submit an agreement between you, the mortgage provider and Petra instructing us to place a lien on all/a part of your benefits in respect of your obligation to the mortgage provider.

We will place a lien on your account until you pay up your mortgage loan, otherwise, it is only the mortgage provider who can request for withdrawal of the funds you’re your account in the event of default.

As soon as you make payment into the scheme it is invested.

Savings Booster is a tier 3 product for individuals – it is invested in the same asset classes as a Tier 3 scheme. Some of the asset classes approved by NPRA are treasury bills, fixed deposits, corporate bonds and government bonds.