The Social Security and National Insurance Trust (SSNIT) has sought for more discussions with the government and labor unions on raising the retirement age from 60 to 65 years.
Given the Trust’s huge liabilities, Dr. John Ofori-Tenkorang, the Director-General of SSNIT, explained that raising the retirement age, will not only relieve the Trust’s load but also boost contributions to the organization.
“The question of increasing the retirement age is something that we have to look at. And this is something that you do in the tripartite way where government, employers and labor sit down and discuss”.
Dr. Ofori-Tenkorang
According to Dr. Ofori-Tenkorang, his outfit pays pensions of contributions as old as 100 years, and therefore extending the retirement age to 65 years must be carefully considered. He stated that the longer people live, the greater the financial strain on the organization.
“After 75 years, we’ll continue to pay you until the good Lord calls you home. So, in theory, SSNIT can be paying till you are 101 years. The liability that SSNIT takes on can increase enormously as long as people are living longer.”
Dr. Ofori-Tenkorang
The Director-General further posited that advances in medical technology have improved people’s lives and therefore increased their lifespan, averring that “people are becoming health conscious and taking care of themselves and people are living longer”.
Dr. Ofori-Tenkorang cited the United States as an example of a successful pension scheme, urging Ghanaians to adopt the US system.
“So, the question then becomes, should we let people contribute a little bit more by gradually shifting the retirement age? In other countries, in the US for example, you don’t get social security until you are 65”.
Dr. Ofori-Tenkorang
Better Marketing of SSNIT
Dr. Ofori-Tenkorang tasked the organization’s marketing department with projecting the Trust’s benefits to Ghanaians. He stated that the majority of Ghanaians are unaware of the numerous benefits that come with becoming a member of the trust.
“We at SSNIT over the years have not actively and convincingly sold the message and explained to people what the Scheme offers and how they are shortchanging themselves by not taking advantage of the offering.”
Dr. Ofori-Tenkorang
He also mentioned that SSNIT is a better investment vehicle than other investment portfolios like Government treasury bills. The Scheme, he added, pays more than what people actually contribute to the organization. Hence, he argued that the best investment portfolio to ensure comfortable retirement life is the Trust.
“The SSNIT Pension Scheme guarantees returns which is higher than what members would have received if they had invested the contributions, they give to us monthly in the safest investment that is Treasury Bills. We analyzed the contribution records on randomly selected pensioners throughout their work lives. The findings indicate that the total contributions plus interest is far less than the present value of the pensions we pay them over the guaranteed period of 12 years under PNDCL 247 or 15 years under Act 766”,
“For some people, their contribution plus interest cannot sustain the pension we pay them even for five years. But the good news is that we will continue to pay even beyond the 15 years if the person is alive.”
Dr. Ofori-Tenkorang
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