SSNIT Reviews Investments Portfolio
The Social Security and National Insurance Trust (SSNIT) is undertaking a thorough review of all its investments to ensure that the returns made are within the expectations of the Trust.
SSNIT admits that some of its investments in some companies have gone bad, hence the review to either recapitalise those companies to make them more vibrant or liquidate them.
Director-General of SSNIT, Dr Frank Odoom, told the Graphic Business that between four and five companies in which the Trust had invested in would have to be liquidated.
The Director-General, however, did not mention the names of the companies but said, “it has come to that and we have no option than to liquidate them to save the Trust some money for other things”.
Investment is one of the critical functions of the management of the social security scheme. As a partially funded scheme, it is challenged to maximise the returns on contributions so as to meet payment of benefits.
As part of the investment policy objectives of the Trust, it is to implement an optimal asset allocation policy; maintain a long-term optimum fund ratio; protect the quantum of the assets of the scheme and the value of those assets, achieve a real return on the investment of at least, positive two per cent per annum and attract, train and retain competent investment talents.
As per its 2008 report, in achieving the investment policies objectives, SSNIT is being guided by the following basic principles that govern the investment of social security funds: safety, yield, liquidity, diversification and social/economic utility.
There have been many agitations from contributors, most of whom think that the investments of the Trust in some companies were not viable and that had affected the pensions paid to retired staff.
According to Dr Odoom, SSNIT was aware of the nature of the investments in some companies and gave the assurance that once the review was done, those that were not in the best interest of the Trust would be done away with.
He said if the investments of the Trust were not that viable as perceived in certain quarters, the Trust would not have been where it was presently.
The total investment portfolio of SSNIT, as of December 2008, grew by more than 32 per cent from GH¢1,639.8 million in 2007 to GH¢2,163.9 million.
Over the last five years, the Trust’s investment portfolio had grown by more than 147 per cent from GH¢877.56 million to 2003 to GH¢2,163.9 million in 2008, showing a compounded growth of 25.3 per cent.
SSNIT has equities in seven unlisted manufacturing firms, two in real estate, four in the hospitality industry, three in the services industry, seven in banking and another four in financial houses.
It also has equities in other unlisted companies whose work is in progress and these are the Oguaa Hotels Limited (78 per cent), Metropolitan Malls Limited (45 per cent) which project has stalled and the Telkom Emporium (27 per cent).
For private equity funds, the Trust has investment in four of them while it has also invested in nine equity holdings classified as economically targeted investment.
Out of the over 30 listed companies on the Ghana Stock Exchange (GSE), the Trust has investment in 24, with its biggest investment in the Ghana Commercial Bank (GCB) where it holds 29.81 per cent and the least in terms of shares is AngloGold Ashanti where it has only 0.02 per cent.
“We have learned from our mistakes and it up to us to protect jealously what we have at the moment and that resolve is very much on course”, he said.
“As we work hard to ensure that the investments bring more than we have now, just as we have done in the past and continue to do, we will ensure that we raise the pensions every year,” he said.
Dr Odoom, a seasoned actuarian, said the reviews being done on the Trust’s investments were being done with the actuarians in the company but would be subjected to the audit of external actuarians to guarantee its total sanctity. GB