The Social Security and National Insurance Trust (SSNIT) in collaboration with the Trades Union Congress (TUC) has organised an educational forum to discuss social security issues, particularly, on pensions and benefit computations.
It was aimed at promoting knowledge of the SSNIT Scheme, empowering organized labour as peer educators for the Trust and demystifying controversial issues surrounding computation of benefits to contributors.
Similar regional public engagements had already been held with public sector workers contributing to SSNIT in Upper East and Northern regions.
Speaking in Wa, the Deputy Director General of SSNIT, in charge of Finance and Administration, Mr Michael Addo said the regional meetings were in compliance with a directive by the National Pensions Regulatory Authority (NPRA).
He said the directive enjoined the Trust to intensify its public education activities and ensure contributors to the Scheme understood how their benefits were calculated.
He said sustainability of the Scheme was very essential and that external actuarial valuation has suggested that the contribution rate necessary to pay benefits over the next 50 years and to accumulate assets representing three years of total expenditure was 12.2 per cent.
“This is substantially higher than the current contribution rate of 11 per cent,” he added.
He said there was therefore the need to look at the prevailing pension’s law governing SSNIT operations.
“In doing this, we must consider factors such as the improvement in average life expectancy after retirement, the use of the average of the best three year’s salary and the current contribution rate of 11%.”
Last year, the Trust spent close to GH¢2.5 billion on benefits payments while currently, over GH¢200 million is spent funding pensions payment to over 200,000 pensioners every month.
Mr addo said a little over one million Cedis was spent on Invalidity Pension every month, adding that, “Some of these invalid pensions have as little as 12 months’ contributions but will have to be paid for the rest of their lives”.
He noted that SSNIT was committed to paying all legitimate claims, saying: “I must state unequivocally, that SSNIT does not cheat workers or pensioners”.
“It is not in the interest of management and staff of SSNIT not to pay the right amount to any pensioner”.
He added that there were no myths surrounding benefits computation, and that, pensions were direct reflections of salaries on which contributions are paid.
“With the SSNIT pension Scheme, what you put in is what you get”.
According to statistics from SSSNIT, approximately 78 per cent of pensioners earn a monthly pension of GH¢1,000.00 or less and approximately 71 per cent of Active Members are contributing on GH¢1,800 or less.
Active members, making up 25 per cent are contributing on GH¢400.00 or less while 25 per cent of pensioners earn GH¢400.00 or less.
About 50 per cent of active members are contributing on GH¢1,000.00 or less with 4 per cent of active members contributing on GH¢5,000.00 or more.
Just one per cent of pensioners earn GH¢5,000.00 or more.
Mr Addo said salary was a key factor in the computation of pensions. “Therefore, the higher the salary you contribute on, the higher your pensions.”
The Pension Manager, Mr Joseph Poku, took participants through SSNIT benefits computation.
He said three factors are considered in the computation, which included the age at which one retires, the average of best three years’ basic salaries on which one contributed and the number of months of contributions.
The Deputy Secretary General of TUC, Mr Joshua Ansah, prior to the presentation of the benefits computation noted that the issue of how to calculate pension benefits had been a bone of contention.
He reminded workers to plan their retirement, saying: “The day you receive your appointment letter, remember your retirement letter is waiting for you”.