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24.11.2007 Business & Finance

Gov’t owes SSNIT ¢122b

Gov’t owes SSNIT ¢122b

The central government is indebted to the Social Security and National Insurance Trust (SSNIT) to the tune of ¢l22.86 billion.

The amount constitutes 28.55 per cent of the total indebtedness of establishments to the Trust, which had gone up from ¢329,14 billion in 2005 to ¢430.32 billion in 2006, representing a 30.74 per cent increase.

Subvented organisations also owe ¢ 16.17 billion while the indebtedness of private establishments is to the tune of ¢291.29 billion, representing 67.69 per cent.

These came to light when the Trust held its third Stakeholders Forum in Accra to provide a platform for contributors and prospective contributors to know the true position and financial performance of the Trust, as well as raise issues of concern regarding the running and management of their contributions.

Presenting his annual report, the Director-General of the Trust, Mr Kwasi Osei, warned that it would use more aggressive means, including legal, to compel recalcitrant employers to pay the social security contributions of their employees.

He said the reluctance of some of the employers to honour their obligation even after deducting the monies from the salaries of their employees was unfortunate and reiterated the resolve of the Trust to compel such employers to mend their ways in the interest of their workers.

Mr Osei said the other way to be used was the publication of names of defaulting employers in the newspapers and aggressive enforcement of compliance activities.

Meanwhile, he said there were currently negotiations with some of the defaulters to ensure that they settled their indebtedness.

On the membership of the pension scheme, the Director-General said "the contributing membership grew from 1,144,493 to 1,211,620. The year 2006 also recorded 90,906 new members and 23,779 withdrawals."

He said total contribution collected in 2006 was ¢2,868 billion, representing an increase of 50.47 per cent over the previous year's amount of ¢1,906 billion.

"The increase in contributions was due principally to the increase in salaries and receipts of some outstanding arrears from the previous year," Mr Osei added.

The Chairman of the Board of Directors of the Trust, Mr J. S. Addo, said the social security fund continued its steady growth through the year 2006 witn a year end fund size of ¢11.82 trillion, a growth of 27.23 per cent from December 2005.

"The Trust is showing consistently improved performance in its investment activities to preserve the financial health of the social security scheme," he added.

He said the Trust also recorded a positive real return of 4.3 per cent in 2006, showing a recovery from a negative 8.4 per cent real return made in 2005.

Mr Addo said the government's White Paper on the new pension reforms had come out and the Trust was co-operating with the Pension Reform Implementation Committee in its work to craft the necessary legislation to give legal backing to the recommended reforms.

During the forum, some pensioners raised issues with the delays in the payment of their pensions and requested the Trust to expedite action in that regard.

They also called for an increase in the minimum amount paid them to enable them to meet what they described as 'the high cost of living' in the country.