The Social Security and National Insurance Trust (SSNIT) paid close to GH¢ 2.5 billion in pension benefits in 2018.
In 2019, it has paid GH¢200 million in paying pension benefits to the over 200,000 pensioners per month.
This is according to the Deputy Director-General of SSNIT in charge of Finance and Administration of SSNIT, Mr Michael Addo who made the disclosure at a forum organised by the Trades Union Congress (TUC) in collaboration with the Social Security and National Insurance Trust (SSNIT) in Sunyani.
“A little over One Million Ghana Cedis is spent on Invalidity Pension every month. Some of these invalid pensioners have as little as 12 months’ contributions but will have to be paid for the rest of their lives. SSNIT is committed to paying all legitimate claims and I must state unequivocally, that SSNIT does not cheat workers or pensioners. It is not in the interest of management and staff of SSNIT not to pay the right amount to any pensioner,” he said.
The forum which has been held in other parts of the country aims at promoting knowledge of the SSNIT Scheme and empowering organized labour as peer educators for the Trust.
These regional meetings, according to the Trust, are also in compliance with the directive by the National Pensions Regulatory Authority (NPRA) for the Trust to intensify public education activities.
The Deputy Director- General stated that SSNIT relies on investment income to supplement the payments of benefits.
“The strategies adopted to improve investments include rebalancing investment portfolio by increasing investments in Fixed Income, enhancing performance of the commercial property portfolio and improving non-performing loan book through restructuring of underlying investee companies. We also decreased equity exposure by exiting or restructuring non-performing investments, improved performance of investee companies through better corporate governance and roll out of corporate targets and completing and monetizing all ongoing real estate projects including those in Joint Venture companies,” he added.
Mr Michael Addo also added that there is no mystery surrounding the computation of benefits and that pensions are a direct reflection of salaries earned by contributors.
“With the SSNIT Pension Scheme, what you put in is what you get. Let me give you some statistics on this.
- Approximately 78% of pensioners earn a monthly pension of GHs1, 000.00 or less.
- Approximately 71% of Active Members are contributing on GH₵,800 or less
- 25% of active members are contributing on Ghs400.00 or less and approximately
- 25% of pensioners earn Ghs400.00 or less.
- 50% of active members are contributing on Ghs1,000.00 or less
- 50% of pensioners earn Ghs600.00 or less
- 4% of active members are contributing on Ghs 5,000.00 or more
- 1% of pensioners earn Ghs5,000.00 or more
In effect, the salary on which one contributes is a key factor in the computation of pensions. Therefore, the higher the salary you contribute on, the higher your pension.”
The Deputy Director- General in charge of Finance and Administration stated that the sustainability of the Scheme is very essential.
“External actuarial valuation has suggested that the contribution rate necessary to pay benefits over the next 50 years and to accumulate assets representing three years of total expenditure is 19.2 per cent. This is substantially higher than the current contribution rate of 11 per cent. There is therefore the need to look at the prevailing pension law governing the operations of the pension scheme. In doing this, we must consider factors such as the improvement in average life expectancy after retirement, the use of the average of the best three years’ salary and the current contribution rate of 11%.”
“I want to assure workers in Ghana that there is only one formula used in benefits computation for all members and this formula is stipulated in the National Pensions Law, Act 766,” the General Manager of Benefits, Mr Robert Owusu Sekyere mentioned.