Listeners of Joy FM have warned government to stay away from using their pension funds in the pending alternative debt restructuring.
Speaking on Super Morning Show on Thursday, the caller who identified himself as Emmanuel questioned the moral authority the government has to use their pension funds.
“I disagree, they shouldn’t touch our money. Sincerely speaking they should touch our funds.”
He subsequently quizzed “what are they doing? What cost are they cutting?”
The Finance Minister on Friday urged the Board of Trustees of Pensions Funds to allow for pension funds to be included in government’s new proposed debt restructuring offer.
According to the minister, the new proposal is aimed at alleviating the cash constraints on the government in the coming years, while fully compensating the pension funds for the value of their current holdings.
He explained in a release that the new offer has been “crafted to facilitate the execution of the MoU, addressing the Government financial needs while maintaining the value of the pension funds.”
He explained in a release that the new offer has been “crafted to facilitate the execution of the MoU, addressing the Government financial needs while maintaining the value of the pension funds.”
Breaking down the new offer, the statement noted that “the proposed offer entails exchanging your current holdings of Treasury Bonds, ESLA bonds and Daakye Bonds for a menu of the currently outstanding New Bonds (issued in February 2023 and maturing in 2027 and 2028 respectively.
“New Bond 2027 and New Bond 2028 featuring an average coupon of 8.4 % with a ratio of 1.15x, thus entailing an increase in patrimonial value.
“This is complemented by an additional cash payment of 10% (strip coupon). The stream of coupons to be received as part of this proposal will therefore be 21% compared to the current 18.5% of the outstanding of old bonds.”
It continued “In 2023 and 2024, both instruments will pay 5% coupon in cash and the remainder will be capitalized into the nominal amount of the two bonds in order to comply with the cash constraints and the macro-framework defined under the programme with International Monetary Fund (IMF).”
According to the statement, the alternative offer has been designed to:
- Achieve the same average maturity as pension funds current holdings of the old bonds (currently between 4 and 5 years)
- Achieve a similar average coupon (currently at 18.5%) while
- Alleviating the cash constraints for the government over the first two years.
As a result, Mr Ofori-Atta urged that the Board of Trustees of pension funds to consider the proposal, adding that government is targeting to settle the offer by end of April, 2023.
But UTAG has rejected the new offer and further cautioned that “governmental intransigence in this matter would not be countenanced as we are willing to fight to ensure that no one robs our members of their pension funds.”
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