SSNIT balances pension relief with long-term solvency concerns

The state pension manager has unveilled a 10 percent increase in monthly pensions for 2026, betting that easing inflationary pressures gives it room to protect retirees’ incomes without undermining the fund’s long-term health.

The move, announced by the Social Security and National Insurance Trust (SSNIT), has delivered sharply different outcomes across the pension scale – ranging from effective gains of more than 36 percent for the lowest earners to just over 6 percent for the highest, reopening debate over fairness, adequacy and sustainability in one of Ghana’s most sensitive social policies.

At the decision’s heart is a redistribution-heavy indexation formula designed to cushion low-income pensioners at a time when inflation has fallen to 5.4 percent as of December 2025.

SSNIT’s Director-General, Kwesi Afreh Biney, said the adjustment ensures that pensions at least keep pace with prices while offering real gains for a majority of retirees.

“It’s important for us to protect the value of pensions that we pay,” Biney said at a press briefing.

“With inflation ending the year at 5.4 percent, what that means is that every pensioner on our payroll has been covered for inflation. Even for the highest pensioner, the increase is about 6 percent and for those on the lower band we’ve gone as high as 36.52 percent.”

The headline 10 percent figure masks the mechanics underneath. Rather than a uniform increase, SSNIT approved a structure combining a fixed 6 percent rise for all pensioners with a flat addition of GH¢91.56 – a redistributive element that disproportionately boosts smaller pensions. The result is a steep gradient of effective increases which narrow as pension size rises.

A pensioner who received the minimum GH¢300 a month in 2025 will now get GH¢409.56 in 2026, an effective increase of 36.52 percent. Someone on GH¢500 will see their income rise to about GH¢621.56, an increase of roughly 24 percent.

By contrast, a pensioner collecting GH¢5,000 will receive about GH¢5,391 – translating into a 7.83 percent gain – while the scheme’s highest pension, above GH¢200,000, will rise by just over 6 percent.

More than 70 percent of SSNIT’s roughly 261,000 pensioners will receive effective increases of 10 percent or more according to the Trust, reflecting what it calls a deliberate tilt toward equity. With inflation now in single digits, the Director-General argued that these gains translate into positive real growth for most retirees.

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“At an inflation rate of 5.4 percent, the real growth for each of those is in excess of 5 percent,” he said.

“The approach reflects SSNIT’s strategy of protecting lower-income pensioners while keeping the scheme sustainable.”

That sustainability constraint is binding. Indexation comes at a cost that ultimately has to be absorbed by the fund, which also pays death benefits, loans and other statutory obligations.

SSNIT estimates that without any indexation, it would have paid about GH¢6.3billion in pensions during 2026 for those already on its payroll.

The approved 10 percent adjustment adds roughly GH¢660million, pushing the annual pension bill close to GH¢7billion – excluding new retirees who will join during the year.

The calculations behind this increase were highlighted by SSNIT’s Chief Actuary, Evelyn Adjei, who said the process is anchored in law and actuarial prudence. Section 80 of the National Pensions Act requires annual reviews of pensions in line with wage growth, inflation and other variables… subject to approval by the regulator.

“We determine the growth in wages from the previous year and look at average inflation for the country,” Adjei said.

She explained that the scheme also assesses the cost of any adjustment and its implications for the fund’s long-term sustainability.

“Indexation is additional money that we are going to pay. We have to make sure that whatever we do is not going to affect the fund too much,” she said.

The outcome, the Chief Actuary said, is a 10 percent overall rate that balances purchasing power protection with affordability.

Redistribution, a core feature of the formula, is intended to reflect the solidarity principle underpinning social security systems wherein higher earners effectively subsidise lower-income retirees through flatter increases.

Beyond current pensioners, SSNIT also raised the minimum pension for new retirees joining the payroll in 2026 to GH¢400 from GH¢300, a 33% jump.

The previous floor had been unchanged since 2019, a period that coincided with sharp increases in the cost of living.

Biney said the adjustment signals renewed focus on protecting the most vulnerable entrants to the scheme.

Independent analysts broadly welcomed the technical design. In an assessment of the 2026 indexation, Africa Centre for Retirement Research (ACRR) described the increase in minimum pension and the flat amount’s size as significant poverty-relief measures.

The GH¢91.56 flat addition, it noted, is the largest redistributive factor applied in more than three decades.

The think-tank also pointed to a legacy of high inflation. Average inflation in 2025 was about 14.6 percent, implying a substantial loss of purchasing power for retirees that needed to be restored.

By combining the 6 percent fixed rate with the flat amount, ACRR said, the average pension of around GH¢1,000 will see its real value fully restored in 2026 – especially as inflation has since eased.

“From a technical and policy perspective, there is a clear and deliberate attempt to get a good balance between paying good benefits and being mindful of the scheme’s long-term financial integrity,” Executive Director-ACRR Abdallah Mashud said, calling the adjustment “responsible and people centred”.

Notwithstanding the 10 percent increase, many pensioners say the increase does not go far enough to meet daily needs – particularly as healthcare costs rise with age. In a survey of 150 retirees cited by ACRR, nearly 79 percent assessed the increase as inadequate, lending weight to calls for deeper reforms.

The Concerned SSNIT Pensioners Forum (CSPF) in a statement rejected the 10 percent increase outright. The group argues that percentage adjustments, however generous on paper, are meaningless without a guaranteed minimum income that reflects basic living costs.

The forum said the 2026 increase “falls far short of cushioning pensioners against rising costs of living and does little to stem pensioner poverty”.

It has proposed a minimum monthly pension of GH¢600 and called for average increases of between 15 percent and 20 percent to restore real incomes eroded over years of inflation.

To sustain that balance, the trust says it must expand its contributor base, targetting an additional 200,000 active members while continuing to invest and grow assets, which stood at about GH¢1.3billion at the end of 2024.

Recent history shows how sensitive the system is to macroeconomic swings. Pension indexation peaked at 25 percent in 2023 as inflation surged, before easing to 15 percent in 2024 and 12 percent in 2025 as conditions stabilised.

The move to 10 percent in 2026 reflects that disinflation trend, but also marks a return to the difficult trade-offs that defined earlier, calmer periods.