The Social Security and National Insurance Trust (SSNIT) has announced a significant boost in monthly pension payments for the year 2024, with a 15% increase aimed at providing enhanced financial support to pensioners.
This decision, made in consultation with the National Pensions Regulatory Authority (NPRA), aligns with the provisions outlined in Section 80 of the National Pensions Act, 2008 (Act 766).
Effective immediately, all pensioners on SSNIT’s pension payroll will experience a notable surge in their monthly payments. The increment comprises a fixed rate of 10% and an additional redistributed flat amount of GH¢79.10.
This strategic adjustment is part of SSNIT’s commitment to ensuring the well-being and financial security of retirees in accordance with the regulations set forth in the National Pensions Act.
The move to Increase pensions by 15% reflects SSNIT’s responsiveness to the evolving economic landscape and the rising cost of living. By providing pensioners with a higher fixed rate and a supplementary flat amount, SSNIT aims to mitigate the impact of inflation and enhance the purchasing power of retirees.
The decision to Implement this adjustment was not taken lightly and involved collaboration between SSNIT and the NPRA to ensure compliance with the relevant legislative frameworks.
Section 80 of the National Pensions Act, 2008 (Act 766), specifically empowers SSNIT to make periodic reviews and adjustments to pension payments, taking into account prevailing economic conditions and other relevant factors.
Speaking at the launch of the 2024 Pension Indexation Report, Chief Actuary, Joseph Poku, said the Trust is focused on expanding and deepening coverage of the basic national socials security scheme to benefit workers who will go on retirement in the future.
Indexation, A Legal Requirement
According to him, the indexation is a legal requirement that aims at reviewing the benefits to help pensioners live decent lives. “The indexation is a technique we use to adjust pensions payment to help maintain the purchasing power of pensioners”, Mr. Poku said.
Providing more details, he said all pensioners on the SSNIT Pension Payroll as of December 31, 2023 will have their monthly pension increased by a Fixed Rate of 10% plus a redistributed flat amount of GH¢79.10.
“Redistribution is a mechanism applied to the indexation rate to cushion low-earning pensioners in conformity with the solidarity principle of social security. The SSNIT Scheme, like any other defined benefit scheme, pays pensions which mirror the earned salaries on which contributions were paid.”
Mr. Poku
Mr. Poku pointed out that the effective increase in pensions would therefore range from 10.05% for the highest-earning pensioner to 36.37% for the lowest-earning pensioner.
“Accordingly, the highest-earning pensioner as of December 31, 2023 will receive ¢186,777.58 per month in 2024. The lowest-earning pensioner as of December 31, 2023 will have the monthly pension increased from ¢300 to ¢409.10 in 2024.”
Mr. Poku
The statement said the average monthly pension will increase from ¢1,527.29 in 2023 to GH¢1,756.38 in 2024.
“The 15% indexation rate will result in an additional pension expenditure of ¢697.64 million. The total expenditure in 2024 for pensioners on the Pension Payroll as at 31st December 2023 will be GH¢5,387.72 million.
“The ¢5,387.72 million excludes pension cost for new awards i.e. the benefits to be paid to retirees who are added to the pension payroll in 2024. The total benefit expenditure is projected to increase from ¢5,445.91 million in 2023 to GH¢ 7,023.43 million in 2024. Pensioners are paid on the third Thursday of every month.”
Mr. Poku
This development is expected to bring relief to pensioners who rely on these monthly payments to meet their living expenses. The 15% increase, combined with the fixed rate and redistributed flat amount, reflects SSNIT’s commitment to adapting to the changing needs of retirees and providing sustainable financial support.
SSNIT’s decision to raise monthly pension payments by 15% for the year 2024 is a positive step towards ensuring the financial well-being of pensioners. This adjustment not only aligns with the legislative framework but also underscores SSNIT’s dedication to addressing the economic challenges faced by retirees and enhancing their quality of life in their post-employment years.
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