The Social Security and National Insurance Trust (SSNIT) says the scheme is financially healthy and is in the position to meet its financial obligations from now to 2036 and beyond.
The Chief Actuary of SSNIT, Mr Joseph Poku, stated this during a press conference in Accra yesterday, and explained that the contributions of members of SSNIT were safe and the Trust had not defaulted and would not default in paying benefits when they are due.
The press conference was to respond to the International Labour Organisation’s (ILOs) 2020 Actuarial Valuation Report which alleged that the SSNIT scheme would collapse in 2036 due to the depletion of the reserves of the Trust.
ILO also recommended that the SSNIT contribution rate should be increased to 22 per cent from the current 11 per cent to make the scheme sustainable.
Mr Poku explained that an Actuarial Valuation Report was done every three years in line with the National Pensions Act 2008, Act 766, Section 53 (2), which mandates the Trust to obtain external actuarial valuation on the Scheme at least once every three years.
He explained that the recent ILO Actuarial Valuation Report, which was the 12th external report on the SSNIT Pension Scheme, was to give the telescopic view of what was possible (not certain) to happen in the future based on the set of assumptions used in the exercise.
The Chief Actuary observed that the 2020 ILO Actuarial Valuation Report on SSNIT did not mean the Trust would collapse in 2036.
The Chief Actuary said assumption in the current ILO 2020 Actuarial Valuation Report was not different from what was made in 2011, 2014, and 2017 which said the reserves of the Trust would be depleted in 2019, 2042 and 2038, respectively
He said in spite of that assumption, SSNIT was still “finically healthy” and with the current contribution rate of 11 per cent, the Trust was able to meet its financial obligations.
Expatiating on the recommendation by the ILO on the need to increase the SSNIT contribution rate, Mr Poku said the contribution rate could be increased through “consultations with organised labour, employers and the government”.
Mr Poku said SSNIT had already taken measures to address the long-term sustainability of the scheme and mentioned some of them as deactivation of ‘ghost’ pensioners from the payroll of the Trust, adding, “Through the exercise, SSNIT has been able to save about GH₵519 million as of March 2024.”
Mr Poku said SSNIT had expanded coverage of the scheme to cover informal sector workers and the self-employed, and currently about 80,000 informal sector workers had been enrolled on the scheme.
He said the Trust had engaged government to pay arrears it owed the scheme and the government recently issued GH₵1 billion in bonds and discussions were ongoing for new bonds to be issued, adding that monthly contributions had been fully paid up to January 2024.
Mr Poku said SSNIT was increasing investment in viable listed equities and had sought the approval of the Board to approve the refurbishment of key commercial properties in the Ridge areas to increase occupancy levels and rental income.
Mr Poku said another Actuary Valuation study on Trust would be commissioned this year in line with the SSNIT law.
BY KINGSLEY ASARE