Accra, Sept. 21, GNA - The Social Security and National Insurance Trust (SSNIT) should be restructured with Government's support and participation of stakeholders, the Presidential Commission on Pensions has recommended.
In a 161-page report, the nine-member Commission chaired by Mr Thomas Ango Bediako, Former General Secretary of the Ghana National Association of Teachers (GNAT), recommended the review of the SSNIT law to reduce the "overbearing" government presence on the Board and the de-facto control of the Fund by government and redefine the responsibilities of the Board to reflect best governance practices. The Law should also introduce a statutory reporting system and restructure the existing scheme in view of the proposal for a three-tier pension system.
The Commission has recommended a three-tier pension structure, comprising two mandatory schemes and one voluntary scheme to ensure retirement income security for workers.
The Commission noted that over the years, the SSNIT scheme had experienced serious credibility problems as a result of the low lump sum benefits paid, poor management of the funds and a faulty institutional design, which enabled the government to have a larger presence and control over the Governing board and to interfere in the management of the Funds to the detriment of contributors.
The scheme also suffers from a high default rate. On ownership, the Commission said it discerned divergent views over the ownership and control of SSNIT and funds, but supported the argument that the government as a "settlor" of the Trust had no defined legal role after setting it up and appointing trustees who should hold it in trust for the contributors.
The Commission said its attention was drawn to the shrinking ratio between new entrants and retirees.
The Commission said it was of the view that SSNIT should embark on a major membership drive, supported by incentives, to ensure the speedy increase in the numbers of formal contributors and self-employed. It said owing to poor investment returns, the Commission had recommended that steps be taken to hive off the investment responsibility from the operations of SSNIT and allow professional management teams or a new investment company with high professional integrity to manage the Fund.
The Commission also recommended that SSNIT should move away from direct investments and management of companies.