Establishments indebtedness to SSNIT, threat to sustainability — Director General
The Director General of the Social Security and National Insurance Trust (SSNIT), Kofi Osafo Maafo says the Trust was working out modalities to engage the public sector on a debt payment plan.
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He indicated that increasing indebtedness in employees contributions of especially public establishments to SSNIT posed a threat to the scheme's sustainability.
He said to address the high indebtedness of the public sector to the trust, the trust would work public establishments to pay all contributions owed the Trust.
He said while both public and private establishment owed the trust, SSNIT had resorted to all measures including engagements and legal action to get the private establishments to comply.
Mr Maafo was addressing the annual Operations and Benefits Conference of senior management of SSNIT at Elmina today.
It was attended heads of departments and branch managers of SSNIT to discuss effective ways of improving efficiency in SSNIT's operations.
Mr Maafo said the move was to get the public establishments to put payment plans to ensure compliance saying people would were continually retiring and if contributions were not paid regularly pensions could not be paid in future.
He said while SSNIT had always put in place measures for compliance, the initiative was an extra drive towards sustainability of the scheme.
Mr Maafo observed that the irregular contribution payments for public sector workers by the controller and accountant General’s department on behalf of staff of the workers were delayed.
He said establishments indebtedness to the scheme deprived it of investable funds and impacted the sustainability drive of the scheme.
He said "given that the Ghana government is the largest employer, it is obvious that we will have many claimants being government workers retiring and coming for their benefits and this is a huge burden on the Trust.
He said these situations must provoke the management and staff into action adding that the Trust's strategic direction should provide a framework, that will guide it in surmounting the sustainability issues.
Again, he stated that the rate of increase in benefit payments is outpacing the rate of increase in contribution collection. As more members retire and start drawing benefits, the financial demands on SSNIT grow more rapidly than the contributions coming in.
Mr Maafo said total benefits paid increased from GH¢941.27 million in 2014 to over 5 billion cedis (GH¢5,458,070,000.00) in 2023 as compared to contribution collection of a little over 1.7 billion cedis (GH¢1,784,430,000.00) in 2014 to a little over 6 billion cedis (GH¢6,014,950,000.00) in 2023.
Within this period, he stated that benefits payments grew by a compound annual growth rate of 21.5 oer cent while contributions collection increased by 14.46 per cent.
Paying more than collected
He said this situation where the Trust paid out more than it collected should be a source of great concern to all of us.
Secondly, he said the changes introduced by the National Pensions Act 2008, Act 766; the lowering of funding from 17.5 per cent to 11 per cent and vesting period of the scheme from 240 months to 180 months, combined with enhanced benefits such as the increased guaranteed period from 12 to 15 years, have further put a strain on the Trust.
"We are indeed burdened as a pensions institution and until the law is amended to correct some of these, we would have to proffer innovating strategies which can lessen the impact.
He said the Trust's introduction of the Self Employed Enrollment Drive (SEED) to promote enrollment of the informal sector onto the scheme was anticipated to improve enrollment.
Embracing technology
He said these hurdles called innovative measures to be attuned with global trends in managing pensions schemes by embracing technology saying the Trusts current medium-term strategic plan called for innovative approaches to minimise the indebtedness of establishments to the scheme.
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"It is a must that we leverage technology digital platforms, AI and data analytics to enhance member and client experience, streamline our processes and improve investment decisions," he stated
He said SSNIT would also work towards ensuring that clients and potential clients were committed towards contributing the extra cedi to the Trust to sustain it.
He thanked the staff for their support to management in their trying times and pledged that management would work to provide them with the training to enhance skills, service delivery and engagement with clients.
Promote scheme
The Deputy Director General of Operations and Benefits at SSNIT, Juliana Kpedekpo, who delivered the keynote address noted that the law did not require the majority of the workforce, who were in the informal sector to obligatorily participate in the SSNIT scheme.
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She therefore called on all SSNIT employees to promote and support the scheme, she particularly highlighted the importance of attracting self-employed individuals to join.
Ms. Kpedekpo observed that educating people about the scheme, would encourage individuals, especially those who were self-employed to appreciate the quality of services offered and commit to enroll.
She urged employees to ensure transparency in their processes by ensuring customers had easier access to their account statements, enable them to update their nominee lists, and conduct other related activities seamlessly emphasizing that this would help in fostering trust among all members.
The Chief Internal Auditor of SSNIT, Emil Amenuvor said pensioners had increased from 971 in 1971 to 249,722 in 2024 saying more people more benefited from the scheme.
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He said it was imperative that employers worked closely and promptly with the scheme to ensure efficiency saying delays or failure to pay contributions would impact the scheme critically.
He reiterated the need to adapt technology to improve reliability and efficiency in operations for a more robust scheme.