SSNIT restructures its investment portfolio

The Social Security and National Insurance Trust (SSNIT) is restructuring its investment portfolio to focus on turning around non-performing assets and expanding exposure to fixed income securities to ensure predictable returns and safeguard pension payments.

Director-General of SSNIT Kwesi Afreh Biney said this move aligns with the fund’s maturity phase – wherein rising pension obligations require more stable and reliable income flows. Back in the day, in 1991 or even 1998, SSNIT’s payout was around 20 percent; however, the payout ratio is now 86 percent – meaning that for every ten cedis that come in 8.6 goes to pay pensions.

With such a high payout ratio, SSNIT must rebalance its portfolio for greater predictability.

The strategy involves unwinding from underperforming unlisted investments and channeling released liquidity into the fixed-income market, in line with policy guidance from the National Pensions Regulatory Authority.

Despite the shift, SSNIT will continue to invest in profitable listed equities. The Director-General noted that of the GH¢4billion growth in the fund’s portfolio this year, GH¢2billion came from investments linked to the Ghana Stock Exchange.

Afreh Biney acknowledged that some of the Trust’s unlisted investments remain non-performing, which necessitates the ongoing portfolio cleanup.

The Trust also intends to exercise its shareholder rights more assertively in companies where it holds significant equity stakes.

“Once we hold at least 26 percent, we have blocking rights and we will not hesitate to activate those rights if necessary,” he said, stressing that SSNIT’s oversight role will be strengthened to prevent mismanagement.

He assured contributors that SSNIT’s investments remain in “good hands” and the Trust is committed to improving returns, expanding coverage and enhancing convenience for contributors.