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05.11.2008 Business & Finance

SSNIT in distress

By B&FT
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The total indebtedness of institutions registered under the Social Security and National Insurance Trust (SSNIT) has put the Trust in a distress situation.

Companies' total indebtedness to SSNIT in respect of social security contributions as shot up to GH¢54.4 million as at the end of 2007 from the GH¢43 million recorded the previous year.

Of this amount, the Controller and Accountant General's Department owes the Trust more than GH¢16.4 million, representing about 30 per cent of the total indebtedness while the indebtedness of private enterprises stands at GH¢33.4 million with government's subvented establishments owing GH¢4.6 million in the period under review.

The Chairman of the SSNIT Board, John Saka Addo, said the indebtedness of some distressed state-owned enterprises has had a significant impact on SSNITs overall debt recovery performance.

He said SSNIT has put in place various mechanisms to recover the debts owed it by private institutions, to enforce compliance by employers, prosecution of defaulting employers and negotiations for payment of contributions arrears by genuinely distressed employers.

"For government, we only hope that in the years ahead SSNIT and government will agree on acceptable terms to settle its indebtedness," he said.

Currently, there are more than 1.2 million members registered under the SSNIT pension scheme with a total contribution of about GH¢385 million in 2007 as against the GH¢287 million collected in 2006.

The Trust also has more than 81,000 pensioners on its list, showing a 10.4 per cent increase over the 2006 figure of 73,000.

As a result, the total value of benefits paid by SSNIT during 2007 stands at GH¢117 million as against the previous year's value of about GH¢80 million.

The fund size of SSNIT also increased by 47 percent from GH¢1.2 billion to GH¢1.7 billion with a 10.9 percent real return on investment in the period under review. However, the Trust net investment income for 2007 declined from about GH¢126 million in 2006 to GH¢106 million.

SSNIT is one of the major institutional investors on the Ghana Stock Exchange, with investments in about 25 listed equities out of the 35 listed firms on the capital market.

In 2007, the Trust total investment portfolio recorded growth by about 37 per cent from GH¢1.2 billion in 2006 to GH¢1.6 billion.

Mr. Addo, who is also the Chairman of Prudential Bank, said the performance of the Trust over the years has put it on the right frame to meet its obligations and liabilities in future.

Source: B&FT

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