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27.05.2019 Business & Finance

Approximately 78% Of Pensioners Earn GH¢1000 Monthly Or Less—SSNIT

Director- General of SSNIT, Dr John Ofori- TenkorangDirector- General of SSNIT, Dr John Ofori- Tenkorang

Approximately 78 percent of pensioners in Ghana, earn a monthly pension of GH¢1,000 or less.

In addition to that, 25% of active members are contributing on GH¢400 or less approximately, 50% of active members are contributing on GH¢1,000 and 4% active members are contributing on GH¢5,000 or more.

These statistics were disclosed by the Director General of SSNIT, Dr. John Ofori-Tenkorang in a presentation at a Forum held in collaboration with the Trade Union Congress (TUC) at Bolgatanga, Upper East Region.

This comes at the back of several complaints made by some Ghanaians about low pension payments with many accusing the Trust of shortchanging pensioners.

However, Dr. Tenkorang has said there are no myths surrounding benefits computation, adding that pensions are a direct reflection of salaries on which contributions were paid.

He explained that the salary on which one contributes is a key factor in the computation of pension, therefore the higher the salary you contribute on, the higher your pension.

Three factors which include; the age at which one retires, the average of the best three years' basic salaries on which one contributed, and the number of months of contributions, according to him, are considered in the computation of benefits.

SSNIT Gives Life Policy

Touching on the generosity of the scheme, he said “the Scheme is generous because it gives you a life policy. This is a fact often ignored or looked over when we talk about the SSNIT Scheme. Our scheme takes care of all pre-existing conditions without a medical examination and it allows you to join all the way up to the age of 45 where certain risks are quite high. I have not quantified this, but I am sure that if you were to buy this kind of cover from a private insurance firm, the premium will be quite steep.”

He emphasized that the Trust is the only institution that guarantees Social Security benefits ranging from the Old age retirement pension, Old-Age Lump sum, Invalidity Pension and Survivor’s Benefits for a sign-on contribution amount of just 11% of a basic monthly salary.

According to him, the commercial premium that would be required to underwrite the provision of these range of benefits exceeds 11% of a basic monthly salary.

“In doing these, the Trust is mindful of the sustainability of the Scheme. External actuarial valuation has suggested that the contribution rate necessary to pay benefits over the next 50 years and to accumulate assets representing three years of total expenditure is 19.2 percent. This is substantially higher than the current contribution rate of 11 percent. There is, therefore, the need to look at the prevailing pension law governing the operations of the pension scheme. In doing this, we must consider factors such as the improvement in average life expectancy after retirement, the use of the average of the best three years’ salary and the contribution rate of 11%.”

Meanwhile, the CEO of National Pension Regulatory Authority (NPRA), Mr. Hayford Atta Krufi said some of the misconceptions about pensions are as a result of the lack of transparency bedeviling the Scheme as well as the lack of continuous engagements of key stakeholders of the Scheme.

He, however, commended the Board and Management of SSNIT for their willingness and their commitment to engage organized labor to address these issues of concern.

On his part, the Deputy Secretary General of the TUC, Joshua Ansah stated that due to the concerns raised by workers and the subsequent media attention garnered, the Congress felt it wise to bring SSNIT to engage labor and clarify any issues about the Pension Scheme.

He further charged participants to take an active interest in their Social Security and retirement planning and to encourage their friends and colleagues to do the same.

The educational forum is part of the directives by the NPRA to the Trust to intensify its stakeholder engagements.

Participants at the education forum in BolgaParticipants at the education forum in Bolga