Today in History: SSNIT may not be able to pay full benefits on time by 2037 – Report

An Actuarial Valuation Report on SSNIT showed that funds relied on by the Fund to pay benefits are running low, and may become unsustainable by 2037.

The report said that “the 2014 assessment did not only certify that the current assets of the SSNIT scheme, together with future contributions, will not be sufficient to pay all future benefits and administrative and operational expenses over the projection period, it also projected the fund reserves were set to deplete in 2042. Three years later, that is, the subsequent valuation in 2017 however, predicts that the reserves deplete in 2037(5 years earlier)."

Read the full story originally published on November 24, 2021, by GhanaWeb

Contribution rate to the pension scheme is low

SSNIT’s fund reserves may deplete earlier than projected

Government’s intervention crucial to the sustainability of SSNIT

The Actuarial Valuation Report of SSNIT has shown that the funds on which SSNIT relies to pay benefits are running low.

As a result, if systems are not properly put in place, in less than 19 years, the Trust’s fund reserves will not be able to support the payment of scheduled benefits in full and on time.

The report stated that “the 2014 assessment did not only certify that the current assets of the SSNIT scheme, together with future contributions, will not be sufficient to pay all future benefits and administrative and operational expenses over the projection period, it also projected the fund reserves were set to deplete in 2042. Three years later, that is, the subsequent valuation in 2017 however, predicts that the reserves deplete in 2037(5 years earlier)."

This is largely contributed to the contribution rate of members of SSNIT and the active working population of the country.

Executive Director, Africa Centre for Retirement Research (ACRR), Abdallah Mashud, speaking on the sustainability of the SSNIT pension scheme: current actuarial status, implication, and proposed policy responses said the revelations from the actuarial valuation present various “red flags” that need the most urgent attention.

According to him, the true financial state of the scheme has been completely shielded from the general public, media, and stakeholders making it quite difficult for them to appreciate the effects of happenings within the Trust.

He intimated that "one useful way of reaching the funding objectives of a better managed public pension system is to provide better information on the financial development of the scheme by regularly reporting on how changing demographic and economic factors interact with public pension systems.”

According to its statistics, the Social Security and National Trust fund has about 1.7 million covered workers. The scheme provides steady monthly cash benefits to an estimated 220,000 old age and invalidity pensioners as well as Lump Sum cash benefits to thousands of bereaved families (mostly widows and orphans).

It is however been suggested that “if the sustainability of the system that supplies income security cover for older persons is threatened, policymakers and the parliament of Ghana need to intervene”.

Watch the latest episode of BizTech below: