The Member of Parliament (MP) for Cape Coast South, Mr George Kweku Ricketts-Hagan, has made a strong case for Social Security and National Insurance Trust (SSNIT) to be discouraged from selling its long-term assets.
According to the law maker, for SSNIT to continue to be a healthy solid financial institution in the pension space, it needs to review its entire investment portfolio and strategy of its asset allocation and investment in key long-term strategic assets.
Mr Ricketts-Hagan urged the Trust to stop divesting its major assets at discounted prices. He called for those investments to be guided by, among other things, safety, capital preservation, and liquidity.
“If a company is seeking for strategic partner(s) or investor(s) for rundown assets, like most of these SSNIT hostels, and they themselves are not willing to put in any money, then they are inviting offers of knockdown prices for their assets, which would be a loss to SSNIT and invariably to the contributors and the Pension Scheme.”
Mr Ricketts-Hagan
The Member of Parliament noted that if it was partnership that SSNIT was seeking for to transform its hostels to world class, then what happened to the agreement it signed with Legacy Hotels Management Services Limited, a world class hotel management company, which has created and managed a number of world class hotels across Africa, including the Labadi Beach Hotel.
“One wonders what is next for SSNIT? Is it going to sell-off its commercial office buildings, such as Premier Towers, Heritage Towers, Ridge Towers, World Trade Centre Building and the SSNIT Emporium Building?”
Mr Ricketts-Hagan
SSNIT is The Driver of the Capital Market
Mr Ricketts-Hagan noted that SSNIT was the largest financial institution in Ghana, second only to the Bank of Ghana. He said that, “It is the largest single institution investor on the Ghana Stock Exchange (GSE) and has been the main driver of the development of the capital market in Ghana.”
Mr Ricketts-Hagan averred that the Trust holds over Three Billion Ghana Cedis of the entire market capitalization and a significant number of shares across 22 out of 37 listed companies on the GSE at a market valuation of GHC2.7 billion as at June 2018, declaring that “this is how vital SSNIT is to Ghana’s economy.”
Again, Mr Ricketts-Hagan said “As the largest pension fund in the country, it has capital for long term investments. It is therefore, essential that SSNIT continues to invest in the country’s large commercial infrastructure projects to propel economic activities that would lead to economic growth.”
The lawmaker added that these long-term projects, if well-selected and well invested in, will yield the desired returns needed to sustain pension payouts of retired workers.
“The people who are working today, are paying the bulk of the pension benefits of those who have retired but as people live longer, well into their old age and less people are entering the formal workforce due to rising unemployment, the SSNIT current model will in the near future not be sustainable. SSNIT will therefore, have to grow long-term assets faster than it is doing at the moment, to flip the gap.”
Mr Ricketts-Hagan
Mr Ricketts-Hagan intimated that based on the results of valuation reviews in 2014, 2017 and 2020 of the SSNIT Scheme by an External Acquary from the International Labour Organization, the Scheme would not be financially sustainable in the foreseeable future.
“The National Pensions Regulatory Authority, which was the regulator of all pensions in the country, has quite frankly been weak from inception when it comes to the supervision of SSNIT. It should therefore, be strengthened to provide its oversight responsibilities in regulating and monitoring the operations of SSNIT and the other tiers of pension schemes to ensure effective administration and longevity of all pensions in Ghana.”
Mr Ricketts-Hagan
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