Ghana’s pension funds are not just holding houses for your retirement contributions. They are active investors in the economy, buying government bonds, holding shares in banks, funding power plants, and earning dividends that help your money grow. But how exactly do they make money? The ASJ answer reveals a system that is profitable and stable, yet heavily dependent on one borrower: the Government of Ghana.
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The Core Business: Investing Your Contributions
Pension funds make money by investing the contributions they receive from workers and employers. Every month, money flows into the fund. The fund managers put that money to work across different asset classes, earning returns through two main channels:
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Interest income – from bonds, fixed deposits, and other debt instruments
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Dividends and capital gains – from shares in companies and other equity investments
The returns are then added to the fund’s assets, growing the pool of money available to pay future pensions.
Where the Money Comes From
Government Securities: The Biggest Earner
The largest source of income for pension funds in Ghana is government securities. Under the National Pensions Regulatory Authority (NPRA) guidelines, funds can allocate up to 75% of their assets to Government of Ghana bonds . In practice, over 70% of pension fund assets are invested in government securities .
How the money is made: When a pension fund buys a Treasury bill or bond, the government pays interest on that money. For example, if a fund buys a 364-day Treasury bill at a rate of 10%, it earns that interest when the bill matures. This is the safest and most predictable source of income for pension funds.
The 2022–2023 Domestic Debt Exchange Programme (DDEP) showed both the risk and the reward of this strategy. While many investors lost money, pension funds received favourable treatment. Banks earned about 9% yields on restructured bonds, while pension funds achieved close to 19.5% returns .
Equities: The Growth Engine
Pension funds also invest in shares of companies listed on the Ghana Stock Exchange. The NPRA allows up to 20% allocation to equities .
How the money is made: When a pension fund owns shares in a company, it earns money in two ways:
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Dividends – a share of the company’s profits paid to shareholders
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Capital gains – when the share price rises, the fund can sell for a profit
SSNIT, the largest pension fund in Ghana, has seen strong performance from its equity investments. In 2025, SSNIT’s investments on the stock exchange grew by about GH¢2.5 billion, and dividends from the stock exchange alone exceeded GH¢300 million . By June 2026, equities accounted for GH¢21 billion of SSNIT’s portfolio, or 59% of total assets .
Bank Deposits and Money Market Instruments
Pension funds can place up to 35% of assets in bank securities like fixed deposits, negotiable certificates of deposit, and bankers’ acceptances .
How the money is made: Banks pay interest on these deposits. However, there is a catch. Banks often issue fixed deposits to pension funds at rates lower than Treasury bill rates. This allows banks to earn a risk-free margin while pension contributors bear opportunity costs . In other words, the pension fund could have earned more by buying Treasury bills directly, but it chose the bank deposit for convenience or liquidity.
Corporate Bonds
Pension funds can invest up to 30-35% of assets in corporate debt securities, including debentures, notes, and mortgage-backed securities . These must be investment grade and listed on an approved exchange, or privately rated.
How the money is made: Corporate bonds pay interest, usually at a higher rate than government securities to compensate for the higher risk. This is a growing area, with the Ghana Stock Exchange reporting that 15 companies had raised about GH¢24 billion through corporate bonds since 2015 .
Alternative Investments
The NPRA has increased the allocation for alternative investments to 25% of assets . This includes real estate investment trusts (REITs), private equity funds, and infrastructure investments.
How the money is made: These investments generate income through rental yields, capital appreciation, or profit distributions. Prime commercial property in Accra offers rental yields estimated between 8% and 11%, compared to about 4% to 5.5% in more mature global markets . However, actual uptake has been slow, with only 1.1% of assets allocated to alternatives as of 2024 .
How Much Do Pension Funds Actually Earn?
The returns vary by fund and by year, but the overall picture is strong.
Private Pension Funds
The Private Pension Industry recorded a portfolio return of 24% in 2023 . In 2025, Enterprise Trustees, one of Ghana’s largest pension trustees, delivered a 21.3% gross return, outperforming its benchmark of 18.09% .
The Enterprise Personal Pension Scheme posted even stronger returns in 2025:
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Sunnyside Plan: 22.24% return
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Good Life Plan: 18.30% return
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Asetena Pa Plan: 18.05% return
SSNIT (Tier 1)
SSNIT’s real return on investments rebounded from a negative 4.2% in 2024 to a positive 8.03% in 2025 . By mid-2026, the real return on investment had climbed to over 18%, driven by strong equity performance . SSNIT’s total assets reached GH¢30.6 billion by the end of 2025, with a 23.8% return on investments .
The Concentration Problem
While pension funds are making money, there is a structural weakness in how they earn it. Over 70% of pension fund assets are invested in government securities .
This concentration means that pension fund returns are closely tied to the government’s fiscal health. When the government restructures its debt—as it did in 2022–2023—pension funds can suffer significant losses. The DDEP exposed this risk, even though pension funds received better treatment than other investors.
The NPRA has acknowledged this problem and increased the alternative investment allocation to 25%. However, pension fund managers remain cautious about venturing into unfamiliar asset classes, particularly given the strict fiduciary responsibilities attached to managing retirement savings.
What This Means for Your Retirement
If you are a formal sector worker in Ghana, your pension money is working for you. It is earning interest from government bonds, dividends from stocks, and returns from other investments. In 2025, the private pension industry delivered returns of over 20%, and SSNIT’s real return reached 8.03%.
But your retirement savings are also exposed to concentration risk. The heavy reliance on government securities means that a future debt restructuring could affect your returns. The push toward diversification—into private equity, infrastructure, and real estate—is intended to reduce this risk over time.
Quick Facts
| Topic | Details |
|---|---|
| Largest Income Source | Government securities (70%+ of assets) |
| Equity Allocation Limit | 20% |
| Corporate Bond Limit | 30-35% |
| Alternative Investment Cap | 25% |
| Private Pension Return (2025) | Up to 22.24% (Enterprise Sunnyside Plan) |
| SSNIT Real Return (2025) | 8.03% |
| SSNIT Total Assets (2025) | GH¢30.6 billion |
| Enterprise Trustees AUM (2025) | GH¢5.99 billion |
Frequently Asked Questions
1. How do pension funds in Ghana make money?
Pension funds in Ghana make money by investing contributions in government securities, corporate bonds, bank deposits, equities, and alternative investments. They earn interest, dividends, and capital gains on these investments .
2. What is the biggest source of income for Ghanaian pension funds?
Government securities are the largest source of income. Over 70% of pension fund assets are invested in Government of Ghana bonds, Treasury bills, and notes .
3. How much did private pension funds return in 2025?
Enterprise Trustees delivered a 21.3% gross return in 2025. The Enterprise Personal Pension Scheme’s Sunnyside Plan returned 22.24%, while the Good Life Plan returned 18.30% .
4. How much did SSNIT earn in 2025?
SSNIT’s real return on investments was 8.03% in 2025, recovering from a negative 4.2% in 2024. Its total assets reached GH¢30.6 billion, with a 23.8% return on investments .
5. Do pension funds invest in the stock market?
Yes. Pension funds can allocate up to 20% of assets to equities. SSNIT’s equity investments grew by GH¢2.5 billion in 2025, and dividends from the stock exchange exceeded GH¢300 million .
6. What are the risks of pension fund investment in Ghana?
The main risk is concentration. Over 70% of pension fund assets are in government securities, making returns vulnerable to government debt restructuring. The 2022–2023 Domestic Debt Exchange Programme exposed this risk.
7. What is the NPRA doing to diversify pension fund investments?
The NPRA has increased the allocation for alternative investments to 25%, making up to GH¢25 billion available for private equity, real estate, and infrastructure. However, actual uptake has been slowÂ
Source: Accra Street JournalÂ
Last Updated on September 16, 2026 by Samuel Kwame Boadu
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Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.
