From pension to wellbeing: A study of retirement income and wellbeing of retirees in Ghana

A major challenge for governments and policy makers around the world, including Ghana, is how to provide retirement incomes that are able to ensure wellbeing in retirement. Without adequate pensions, poverty rates, which are already high among retirees, will be much higher. In the context of a developing country like Ghana where informal social support for the elderly is declining due to the processes of urbanization and migration, formal social security intervention is an indispensable tool for ensuring equitable development and economic growth. The 2014 UN Development Report, for instance, calls for access to basic services, including pensions, in order to improve the capacities of vulnerable population groups, including the elderly, to withstand livelihood shocks. The notions of capability/functionings and conversion factors in Amartya Sen’s capability approach have been used in this thesis as a conceptual framework to analyse the effect of incomes, socio-demographic characteristics and conversion factors on health, housing, food, social, financial and overall wellbeing of Ghanaian retirees receiving a social security pension under the Social Security and National Insurance Trust (SSNIT) pension scheme (Act 766, 2008).The study employs a mixed methods research design in a two-phased data collection process. Phase I is a survey of 330 SSNIT retirees. Phase II involved in-depth face-to-face interviews with 12 purposively selected respondents from the sample in phase 1. Quantitative and qualitative data were analysed to address three research questions: (1) What is the effect of financial and non-financial factors (retirement income and personal characteristics) on the different dimensions of wellbeing in retirement ?; (2) Is overall wellbeing of retirees better predicted by financial factors than non-financial factors?; and (3) In what ways do personal and environmental characteristics\ua0 enable retirees to translate their retirement income into achieved functionings in overall wellbeing?It was found that both pension income and total individual income have statistical associations with all dimensions of wellbeing (health, housing, food and social), with the exception of financial wellbeing. The qualitative data points to the key role of money in meeting the desired wellbeing of the respondents. Access to health care, house ownership and non-payment of house rent, family support in cash and kind, healthy food choices, continuous family and community engagements, and financial independence are some additional key drivers that enable the achievement of desired health, housing, food, social and financial wellbeing.The analysis shows that while both financial and non-financial factors influence overall wellbeing, the effect of financial factors, measured by their regression coefficients, is bigger than that of any non-financial factor. In effect, income better predicts the overall wellbeing of respondents than non-financial factors. Qualitative interviews with respondents confirm that without sufficient income, achieving desired wellbeing in retirement can be challenging. Hence some retirees resort to retirement work in order to improve their financial situation.The study further finds that in translating retirement income into wellbeing, some non-financial\ua0 factors (sex, age, marital status, number of dependants, number of other household members earning income, number of years worked, position held prior to retirement, and highest education attained) moderate the effect of income on overall wellbeing. However, the moderating effect is higher for retirees with additional sources of income besides pension income. In this regard, respondents’ personal and household characteristics enable or reduce their ability to translate their income into overall wellbeing. In effect, financial and non-financial factors interact in such a manner as to generate overall wellbeing.These findings affirm the call for reforms in retirement income policy to improve the financial situation of retirees in Africa, particularly for those whose retirement incomes are low. This could mean taking a further look at the 60 years compulsory retirement age, and redesigning work roles to create avenues for retirement work for retirees who have requisite skills and experience, and the idea of phased retirement. The findings also call for innovative ways to incorporate into retirement income policies mechanisms for enhancing non-financial characteristics of workers throughout the life course. Finally, a mixed methods capability model for researching retirement wellbeing from a multi-dimensional perspective is proposed as a contribution to the application of Sen’s capability approach