Social Security and National Insurance Trust (SSNIT), Ghana’s pension scheme administrator, has made complains about government’s delay in effecting social security contributions payments to public workers.
According to SSNIT, government’s persistent failure to effect swift payment of public sector workers’ social security contributions is weighing heavily on the organization and its operations.
Usually on quarterly basis, government, through the Controller and Accountant General’s Department pays public sector employees’ contributions; according to Dr. John Ofori-Tenkorang, SSNIT’s Director – General, the arrears can accumulate for three quarters, thus, negatively affecting the pension’s scheme.
When questioned by the Public Accounts Committee of Parliament about the Trust’s recorded losses in 2018 and 2019, the Director – General attributed the losses to delayed payments of public sector workers’ contributions.
Emphasizing more on his earlier statement, Dr. Ofori-Tenkorang indicated that the revenue shortfall in the years in question was as a result of increase in benefit payments and a lack of expected contributions from both the Controller’s and Accountant General’s Department.
The Director-General’s appearance before the Public Accounts Committee was prompted by the 2020 Auditor-General’s report on the Public Accounts of Public Boards, Corporations and other Statutory Institutions, which revealed that SSNIT recorded deficits of GH¢442 million in 2018 and GH¢427 million in 2019.
Even though Director-General did not specify how long the contributions had been overdue, as at July 2022 the arrears were 8 months.
SSNIT invests these contributions in diversified portfolios that guarantee the highest returns for contributors.
Any delays, therefore, in payments can disrupt investment decisions and impact expected returns.
Despite individual pension beneficiaries not being immediately affected by the situation, Dr. Ofori-Tenkorang noted that long-term effects on the Trust could be dire.
“The short-term answer is ‘no’, because if you retire today we would not say that your contributions have not been remitted. As long as it has been filed and acknowledged by your employer that you were working, we will go ahead and pay you everything that is due you; but there is going to be a time when we will not have the cash to pay.”
Dr. Ofori-Tenkorang
Dr. Ofori-Tenkorang further pointed out that in 2020, the Trust recorded a surplus of approximately GH¢1.1billion, followed by a deficit of approximately GH¢302million in 2021. However, predicts a surplus for 2022.
Meanwhile, James Klutse Avedzi, the Committee’s Chairman, stressed that the fluctuations were concerning and needed a comprehensive solution.
Regarding sustainability of the Trust, the SSNIT boss indicated that management is planning to initiate stakeholder engagement and collaboration to achieve a sustainable contribution rate.
SSNIT engages its stakeholders on the Pensions Scheme and its benefits
The Public Education (PE) Team at the Public Affairs Department of SSNIT paid a visit to some institutions to educate various stakeholders about the SSNIT Scheme and its benefits.
Millennium Insurance Company Limited, Association of Small Scale Industries, Korle-Bu Teaching Hospital, Precious Minerals Marketing Company (PMMC), Church of Pentecost, Controller and Accountant General’s Department (CAGD), Decoplast Company Limited and Legon Pensioners Association, were some of the institutions visited.
The SSNIT Public Education team shed more light on the informal sector contributions and advised contributors to encourage self-employed friends and family to start securing their future by contributing to the Scheme.
Altogether, the Team educated 952 stakeholders in the fourth quarter of 2022.
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