SSNIT saves GH¢235m withholding pensions
The Social Security and National Insurance Trust (SSNIT) has in the past four years saved the national pension scheme a total of GH¢235million, by withholding pensions of those who are 72 years and above and have not renewed their pensioner certificates.
The Trust has deleted from its payroll the names of some 22,406 pensioners. Per the Trust, the deactivation exercise is a mechanism put in place by the Trust to ensure that pension is paid to only retirees who are alive.
Addressing pensioners at the 5th Quadrennial Delegate Conference at Dodowa, Dr. John Ofori-Tenkorang – Director-General, Social Security and National Insurance Trust (SSNIT), highlighted the threats that confront defined benefits schemes, such as increasing longevity of pensioners, necessitating the deactivation exercise.
“We need to face the threats that confront defined benefits schemes: such as increasing longevity of pensioners, changes in the work environment. So, as trustees we need to manage the monies prudently; work to improve performance of our investments; collect contributions in arrears; deepen and expand coverage of the scheme; and ensure that only legitimate pensions are paid,” he said.
Pensioner certificates are issued to pensioners aged 72 who retired under PNDCL 247 and 75 years for those who retired under Act 766 and renewed annually.
Since 2018, the Trust has on a monthly basis been deleting the names of pensioners aged 72 and above who fail to complete or renew their Pensioner Certificates. This was however halted in March 2020 due to the coronavirus pandemic. This exercise is meant to ensure that pensions are paid to the right persons. However, in cases where an account is deactivated, the Trust will reactivate such account when the pensioner renews their certificate.
According to the Trust, a total of GH¢3.6billion was paid in benefits such as pensions, emigration benefit, survivors lump-sum, and old age lump-sum or refund of contributions to pensioners during 2021. “This huge amount and the numerous lives affected by the payments show the Trust’s importance in safeguarding social protection,” Dr. Ofori-Tenkorang said.
Last week, SSNIT announced a 10 percent increase in the pension benefits of retirees. This 10 percent is redistributed to cushion the lower-earning pensioners while maintaining the purchasing power of all pensioners.
As a result of the redistribution, 67 percent of pensioners will see their pensions go up by 10 percent or more. And this year’s indexation is expected to cost some GH¢300million more than the pensions paid in 2021.
“The increasing cost of pensions puts additional strain on the Fund; and even though we are poised and ready to pay all accruing benefits as they fall due, we need to organise our house in order to pay pensions in perpetuity,” the Director-General said, citing the impact from the Scheme’s new arrangement.