Dr John Ofori-Tenkorang, the Director General of the Social Security and National Insurance Trust (SSNIT), says enhanced earnings or salaries remained the main determinant of pension computations in the country.
He said contrary to negative perceptions often arising out of expectations on contributions, SSNIT ran a defined benefits scheme on a guaranteed contract and that pension sums were affected largely by salaries of contributors and not the duration of contributions.
Dr Ofori-Tenkorang, who was represented by Mr Joseph Poku, the Scheme’s Chief Actuary was addressing a stakeholder consultation forum in Ho, which was in collaboration with the Trades Union Congress (TUC), and said it was important to consolidate salaries and allowances to affect remittances.
He noted that the Scheme “generously” applied a “formula stated by law,” and that low salaries played a significant part on contributions and payouts.
“Pensions depend on the salary, not how long you have worked. Salaries translate into the pensions that are paid, and there is something wrong with earnings in the country,” he stated.
The Director General said 99 per cent of workers did not earn beyond GHC 35,000 annually, yet the SSNIT maintained a favourable reward scheme that placed payouts on a GHC 300 threshold; almost doubling the pensions of workers of the lowest pay bracket.
“The scheme is very generous, and gives superior value to members’ contributions”, he said, adding that pension rights had been upheld to protect contributions.
“When you are put on pension, we pay you for life.”
Dr. Ofori-Tenkorang said the Scheme paid 3.18 billion GHC in pensions in 2021 and had maintained an indexation mechanism even as longevity of pensioners increased.
“SSNIT never defaulted on payments. SSNIT scheme is there to take care of you when you can no longer work”, he stated, noting how the Scheme’s survivors’ lump sum policy ensured “generous allocations to surviving members of contributor’s family.”
He said it also had a reputable record of invalidity pensions for contributors who are declared unfit to work, as well as emigration benefits for workers leaving the country permanently.
“The scheme is very good. What you put in is what you get”, he stated, and appealed to all workers to take “full advantage” of the scheme and insure all earnings.
The Director General said the Trust was sustaining payments through investments and attracting more contributors.
The Scheme currently has more than 1.7 million active contributors.
The Director General said only one per cent of contributors were self-employed, while 11 million of the population remained potential contributors, and that “SSNIT needs to do more to get them in”.
He assured that SSNIT had rebalanced its investment portfolios to ensure more prudent management of investments, 99 per cent of which were domestic, and which were “performing well”.
Dr, Ofori-Tenkorang said SSNIT was rolling out a comprehension programme to get more self-employed on to the scheme and would soon launch an initiative to that effect.
He said the Trust would sustain public engagement, restructure its service delivery model, and introduce a mobile phone app and payment platform.
He said the TUC’s collaboration on the nationwide stakeholder consultations would help ensure a better understanding of SSNIT’s operations and promote the scheme among workers.
Mr. Joshua Ansah, Deputy General Secretary of the TUC, said stakeholders need to consider the low enumeration of workers and find ways to address them.
He also advised unions to consider educating members on pension and other welfare issues, and ensure executives were accountable and worked to maintain prudent and worthy investments on their labor.
The engagement was attended by local heads of the various workers unions, and who participated in an open forum.
