Review objectives of SSNIT- Study

Ho, Nov. 20, GNA- A Study into the operations of the Social Security and National Insurance Trust (SSNIT) titled " Social Security in Ghana", has recommended a review of the objectives of the TRUST to make it "concise and unambiguous".

The Study was conducted by Professor Kofi Kumado, of the faculty of Law and Dr Augustine Fritz Gockel of the Department of Economics, both at the University of Ghana, Legon in 2001.

"The current objectives of SSNIT are not explicit; they are sometimes contradictory and indistinct", engendering "confusion which has impacted negatively on accountability and responsibility among the Board, Staff and Government" it stated.

The Study was conducted at the instance of the Ghana Trades Union Congress (TUC) and funded by the Friedrich Ebert Foundation of Ghana. It delved among others into the genesis of the country's social security scheme as a Provident Fund, its transformation into its present form, the various laws governing its operations and the social insurance programmes of Switzerland, Chile and Singapore.

The Researchers called for staff rationalization in SSNIT to reduce cost and infuse efficiency into its operations.

Professor Kumado and Dr Gockel said in their report that " many of the shortcomings and weaknesses of SSNIT derive from the structure of PNDC Law 247 and how it is implemented".

To correct the weak oversight responsibility of the TRUST, it was recommended that SSNIT be made accountable to Parliament through annual submission of report and or appearance in the House to answer questions and the submission of audited statements for scrutiny by the Public Accounts Committee of Parliament. The measure "will bring transparency and accountability to its operations and protect SSNIT from excessive government intervention", it said.

The present Oath of Secrecy which members of the Board of the Scheme were required to make, must be scrapped since as representatives, Board members should report back to their constituents, the report stated.

The Researchers recommended a second tier private retirement scheme with wider objectives to enhance social protection, facilitate economic growth, increase national savings, promote investment and facilitate economic growth to achieve poverty reduction and wealth generation.

Such a tier scheme, the report said must be employer-sponsored and tax deductible to provide the required incentives for savings.

A third tier private scheme was also recommended to meet the needs of "merit goods such as housing and education" as pertains in Singapore.

Professor Kumado and Dr Gockel noted that the tax revenues which would be lost to government as a result of a their recommendations would be insignificant. "It is recommended that there should be a contribution ceiling of 35 percent of a contributor's annual income tax deductible for long term savings plans including SSNIT", and tax incentives.

To ensure that their recommendations, when in operation are not in conflict with existing legal and other regulations, the researchers recommended that amendments be made to the current tax regime especially under the "Internal Revenue Act 2000 (Act 592) as amended by the Internal Revenue Service (Amendment Act 2002 (Act 622), and a complete overhaul of current applicable legislation on SSNIT and the Students Loans Scheme".

"When these are done, Ghana will be on the road to promoting a sustainable social protection scheme that would also enhance long-term savings mobilization for development" the researchers said.