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06.01.2005 Business & Finance

Pension Goes Up

By Graphic

Graphic -- The Social Security and National Insurance Trust (SSNIT) has upwardly adjusted pension payments by an average of 27.4 per cent with effect from this month.The increase, which is almost six per cent more than the previous year's, puts the range of payments to benefactors at between ¢125,000 and over ¢35 million a month.

The Public Affairs Director of SSNIT,Mr Kweku Osei-Bimpong, who said this in an interview in Accra yesterday, noted that “the increases range from 12.6 per cent for those at the upper end to 56.6 per cent for those at the lower end”.“The minimum monthly pension for new pensioners joining the pension roll from January 2005 is now ¢125,000,” he added.

In spite of the increase, some pensioners are still not happy with what they are paid at the end of every month and have called on the government to break the monopoly of SSNIT.Some of the pensioners indicate that the trust could pay better pensions for them to make ends meet but is simply reluctant to do so for unexplained reasons.

They argue that the trust, having kept pensioners' money for a very long time, should be in a position to pay what they describe as “realistic pensions”.But Mr Osei-Bimpong said “the general salary levels on the whole, combined with the fact that some employers under-declare the earnings of their employees, continue to impact adversely on the pensions paid”.

He further explained that “on record, there are contributors who declare salaries far below the prevailing minimum wage”.Mr Osei-Bimpong said in many cases, the trust used many other means to get the employers to pay realistic salaries and also contribute to the scheme to enable their employees to enjoy better pensions in the future.

To compel employers to comply with their mandate to pay monthly contributions of their employees to the trust, the names of defaulters are often published in the dailies to alert the employees and the public.Some employers are also taken to court by SSNIT, all in an attempt to compel them to fulfil their obligations.

Against this background, Mr Osei-Bimpong said “in order to help SSNIT to solve the problem of low minimum pension, the trust would like to entreat employers not to under-declare the earnings of their employees, since such practices impact negatively on their pensions”.

He said employees should be alert and also desist from colluding with their employers to under-declare, as had often been the case.Mr Osei-Bimpong advised employers to consolidate the basic earnings and allowances of their employees and contribute on the consolidated earnings to ensure higher pensions on retirement.

“For SSNIT to sustain meaningful guaranteed pensions, employers who pay contributions on behalf of contributors are expected to contribute on at least the prevailing minimum wage,” he added.Meanwhile, he noted that “the one-time bonus promised last year has been credited to the accounts of all pensioners” adding “the flat amount of ¢88,163.75 was paid in December 2004.”

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