25% of Ghanaians earn GHS400 or less – SSNIT explains low pensions
Director-General of the Social Security National Insurance Trust (SSNIT), Dr. John Ofori-Tenkorang, has stated that the often-cited low pension payment is because Ghanaians earn low salaries.
Dr. Ofori-Tenkorang revealed that some 25 percent of Ghanaian workers who contribute to the SSNIT scheme earn as little as GHS 400 or less.
The monthly salary for a person earning the minimum wage of GHS 8.8 is GHS 264, meaning that a quarter of Ghana workers earn a little above the daily minimum wage.
“50 percent of all the contributors said they were earning gross salaries of GHS 1,000 or less – In the formal sector. 71 percent of people in the formal sector say they are earning GHS 1,800 or less,” the SSNIT boss read from a chart showing the distribution of monthly pensions versus salaries for February 2019.
Dr. Ofori-Tenkorang said for Ghanaian workers to earn higher pension during retirement, allowances should be added to the basic salary.
According to him, that will increase the total income on which pension are deducted.
“That, therefore, will require the amendment of the law regulating pensions but the National Pensions Regulatory Authority (NPRA) does not back the proposal for a review of the pension laws.”
CEO of the NPRA, Hayford Atta Krufi, said there can be a national conversation about the proposal but the current law must be made to work.
“I believe that we need to get the law to work a little bit…because 2020 is actually where the first batch of those who came under Act 766 as amended will be going on mandatory retirement,” he said.
He said if pension payments become the result of agitations about low payouts, growth and sustainability becomes an issue.