The Forum of Public Sector Registered Pension is demanding the restructuring of the Social Security and National Insurance Trust (SSNIT).
According to the group, the management of SSNIT is not prudently managing workers’ contributions.
This also follows SSNIT’s claim that its past credit liability will unjustifiably increase to GHS 5.87 billion if it agrees to a directive by the National Petroleum Regulatory Authority (NPRA) to pay 100 percent Treasury Bill rate on past credits of contributors from the date of the first contribution up to December 31, 2019.
Reacting to assertions by SSNIT that it will be in financial distress after 2020, the Chairman of the Forum, Isaac Bampoe said the overhaul of SSNIT has become necessary due to its lack of focus.
“Because of the financial distress of SSNIT, Act 766 was extended for another five years to January 1, 2020, to put their house in order. Anytime there is an issue on this tier-two, the excuse SSNIT will give is that they will be in financial distress. We are fed up with this excuse. But how does SSNIT embark on projects that are not part of their mandate and waste contributors’ money? But when it comes to paying funds to contributors, you say it will be financial distress to the Trust. I think it is time for the whole SSNIT structure to be restructured. I think they have lost focus and have a blurred vision.”
‘Cease fire’ – Labour Ministry on SSNIT and Pensioners brouhaha
The Ministry of Employment and Labour Relations had earlier called for cool heads to prevail between the Social Security and National Insurance Trust (SSNIT) and the Forum for Public Sector Registered Pension Schemes over their gridlock on the payment of past credits of contributors.
In the wake of the stalemate, the Ministry has promised to intervene but urged the feuding parties to cease fire while a workable solution is put in place to address their differences.
“The MELR wishes to say that this issue of past credit is very sensitive in nature to the government and efforts are being put in place by all the relevant stakeholders to have the matter resolved amicably before 2020.
The Ministry is, therefore, directing the two (2) bodies to cease-fire with immediate effect as it takes the necessary steps to resolve the impasse.”
What is a past credit?
A past credit is the contribution of workers to SSNIT before the coming into force of Act 766, which brought about the three-tier pension scheme.
But SSNIT insists that its past credit liability will increase to GHS 5.87 billion if it agrees to a directive by the National Pensions Regulatory Authority (NPRA) to pay 100 percent treasury-bill rate on past credits of contributors from the date of the first contribution up to December 31, 2009.
According to the Trust, the directive is illegal because it is not in accordance with section 94 1 (D) of Act 766, and also not based on an actuarial assessment.
Speaking at a press conference in response to accusations that SSNIT is scheming to shortchange contributors, its Director-General, Dr. John Ofori-Tenkorang, said the directive will leave the scheme in financial crisis.
“If this directive which is not in accordance with the law be implemented, the Trust’s past credit liability will increase to a whopping GHS 5.78 billion as at October 2019 representing an increase of about GHS 4.5 billion over what the liability before the revision that was suggested in the communique was implemented. The effect of this directive will put the whole SSNIT in financial crisis mode from 2022 as the fund ratio will drop from 3.1 to 0.3. This will affect the long term sustainability of the scheme.”