The Deputy Managing Director for Administration at the National Port Authority, Nyekeh Y. Forkpa, has said retirement must be legislated in order to have people retired honorably.
Speaking last Sunday at St. Peter’s Lutheran Church, Sinkor, Monrovia, Mr. Forkpa said there is a need to put in place the necessary regulatory framework, laws to guide any scheme that will support retirement of the people.
Workers are not retiring in dignity, he feared, and some have had to settle for less than the 100 percent of the promised retirement package that was already less than 100 percent of earnings.
He explained that government can participate by formulating a retirement system through legislations that will address complex issues in the retirement process, including the tax treatment of the savings, incentives for employers to set up retirement plans, encourage participation by many employees, and provide a good regulatory framework to protect the interest of workers.
“Government could go further by enforcing the laws through monitoring and supervision of retirement plans and investments, and interpretation of the laws through the court system,” he further stated.
According to him, Retirement planning is not only a personal responsibility but also a national obligation because Liberia will face many social problems without a strong retirement regimen and there is a need to do something about this.
“In developing countries such as Liberia, many people overlook retirement planning because they expect their children to take care of them. That used to be possible, but not so now. The fact is that things have changed over the years and many children are not willing or able to support their parents in retirement,” he explained.
According to him, the systems that made such reliance possible are no longer in existence. “We are no longer having many children to support us through farming. Where there are many children, they often migrate to cities in search of education and jobs; and they begin their own families and take on their own responsibilities,” he observed.
“If you are one of those workers or executives who are relying on their children for retirement, you have to start rethinking because that plan could fail, leaving you to face financial hardship in your old age. This is why it is important to plan for the future. Today, you will observe that pension and retirement problems are becoming more visible in our country.”
“In the case of Liberia, Government is the largest employer. So the government has the added responsibility of helping its employees prepare adequately for retirement, which will send a positive signal to other employers. The Government will have to step up its game and ensure that there is a law in place to help private employers set up retirement plans for their employees,” Mr. Forkpa suggested.
The government must first set up its own program that is adequate to address the issue of income after retirement.
“Some employers feel they have a social responsibility to help provide financial security for those who gave many years of hard work for the success of the company. The Central Bank of Liberia (CBL) and the National Port Authority (NPA) are two entities that come to mind,” he explained.
Mr. Forkpa continued, “The role of employers in this process includes, among others, the creation of the retirement plan, the making of contributions on behalf of employees, and the collection of employees’ contributions for remittance to the retirement plan manager. Usually, the funds are collected, accumulated and managed by professionals.”
According to him, Social Security retirement benefits do not provide sufficient income for most retirees. Financial experts believe that it will take 60% to 90% of a worker’s pre-retirement income to maintain their same lifestyle in retirement. This is why government, corporate, and individual retirement plans are created to augment the pension scheme of the social security program.
“A unique feature of social security retirement benefits is that they may cease at the death of the pensioner. Therefore, those who are blessed with longer lives stand to benefit more from the system. In the case of Liberia, benefits may be paid to children up to certain ages,” he said.