Public Relations Officer (PRO) of the Social Security and National Insurance Trust (SSNIT), Charles Akwei Gershong has stated that with life expectancy rising amongst pensioners and retirees, there have been discussions of increasing the contribution rate.
The Social Security and National Insurance Trust works on the assumption that most of the contributors to the fund are expected to live up to 15 years after they retire, but now, some pensioners live well above this assumption putting some stress on the fund.
Sharing insights into the operations of SSNIT in an interview with Samuel Eshun on the Happy Morning Show, Charles Akwei Gershong noted, “Issues of increasing contributions have been raised in recent times as life expectancy is going up. The guaranteed period for paying beneficiaries used to be 15 years but if you live beyond that 15 year period you will still be paid your benefits. But now people are living longer than 75 years to 90 years and that puts stress on the fund.”
He explained one of the major challenges Social Security enterprises face is with age “and we wish the funding was more. SSNIT cannot decide to increase the contribution rate on its own and organized labour has also expressed the wish to increase the contribution rates. But it’ll take a tripartite committee to do this and SSNIT will only advise on it.”
According to him, actuaries will also have a role to play here as they can investigate and present other factors to necessitate the increase in contribution rates. “But SSNIT cannot say contributions should be increased or not.”
The Social Security and National Insurance Trust (SSNIT) is a statutory public Trust charged under the National Pensions Act, 2008 Act 766 with the administration of Ghana’s Basic National Social Security Scheme. Its mandate is to cater for the First Tier of the Three-Tier Pension Scheme. The Trust is currently the largest non-bank financial institution in Ghana.
The primary responsibility of the Trust is to replace part of lost income of workers in Ghana due to Old Age, Invalidity or Death of a member where dependants receive lump sum payment. It is also responsible for the payment of Emigration benefit to a non-Ghanaian member who is leaving Ghana permanently.
As an employee, one contributes 5.5percent of their basic salary whilst the employer adds up 13percent of the same amount as payment to the fund.
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