Assessing replacement rate among Ghanaian employees

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April, 2016
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This paper focuses on assessing the replacement rate of Ghanaian workers. In order to get an assessment, a relationship is developed between the replacement rate and the adequacy of benefits paid out under a defined contribution (DC) scheme, based on an appropriate investment rate of 5% of the current Ghanaian market, an average replacement ratio of 6.67% was reached. Through actuarial assumptions and calculations the accumulated amounts accrued members of the scheme upon qualification were calculated and subsequently the Replacement Rate was obtained. The number of contributions and years in service and was also used in making deterministic projections. It was found out that the higher investment rate certainly brought about increase in the replacement ratio with considerable improvement in retirement adequacy of the retirement benefits paid out under the defined contribution pension plan as well.
A thesis submitted to the Department of Mathematics, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Msc. Actuarial Science,