“Your Tier One pension scheme run by the Social Security and National Insurance Trust (SSNIT) is solvent now and into the future,” the Director-General of the Trust, Dr John Ofori-Tenkorang, has assured contributors.
In an interview with the Daily Graphic in Accra, he said the scheme presently had enough reserves to pay all accruing benefits due members and their validly nominated dependants.
According to an actuarial report released in 2017, at the current rate of 11 per cent, even if contributions were halted, the investment can help the scheme to survive until 2037.
However, there are serious inherent threats that need to be surmounted, going forward, to keep the scheme sustainable beyond the projected date.
For instance, the report said in part that government’s indebtedness to the scheme, growing numbers of pensioners, growing amounts paid pensioners, employer indebtedness, among others, continued to threaten the long-term sustainability of the defined benefit scheme as run by the trust.
The interview followed a call by the Africa Centre for Retirement Research (ACRR) to Parliament to, as a matter of urgency, amend the laws on pensions to ensure the financial sustainability of SSNIT for the benefit of present and future generations.
Key among the proposals were the upward review of the current SSNIT contribution of 11 per cent and a law to mandate the scheme to present its actuarial valuation reports to Parliament for scrutiny to save the scheme from becoming insolvent.
It also proposed that people who had strong financial and investment backgrounds be appointed to the SSNIT Board, while the government also made efforts to pay the debts it owed the trust.
Noted, we’re fine
But in his response, Dr Ofori-Tenkorang said SSNIT had taken note of the concerns raised by the ACRR and “wishes to assure all stakeholders and the public that the SSNIT scheme presently had enough reserves to pay all accruing benefits.”
He gave an assurance that the concerns raised in the 2017 actuarial valuation report, which was referred to by ACRR, were being addressed.
According to him, key among the concerns raised by the research centre was the debt owed the scheme by employers.
Subsequently, a release issued by the management of the trust last Friday said: “The trust encourages and reminds employers to pay the social security contributions of their workers by 14th of the ensuing month to avoid paying penalties.
“However, where employers fail to do so, they have the option to negotiate terms of settlement.
The management of SSNIT will initiate court action against defaulting employers who fail to take advantage of negotiations,” it said.
The statement said the management of the trust had not relented in its efforts to retrieve all arrears owed the trust by employers to improve the sustainability of the scheme.
For instance, it said, as of September this year, 7,951 criminal cases were pending in court against defaulting employers.
Also, over 500 employers, including government, had arranged for terms of settlement, adding: “It must be noted that the government has, since 2017, paid GH¢5.77 billion to clear social security contributions owed by successive governments.
“SSNIT continues to actively engage the government, the largest employer, to pay the contributions of its employees,” it said.
The release quoted the Director-General of SSNIT, who had hinted in 2019 that the trust was consulting stakeholders for possible reforms in the administration and funding of the basic social security scheme.
Against that background, it said, the trust assured all members and the public that it would continue to ensure prudent management of funds to enhance the long-term sustainability of the scheme.