Social Security contribution; A necessary pain
Contributing a portion of one’s income to a social security scheme to secure a better future is a major challenge for many in the country. This is partly attributable to the fact that they do not understand the essence of social security or they simply feel reluctant to contribute because of the impact it has on their salaries every month.
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But the question is: To what effect is pension contributions to one’s life as far as his/her future is concerned? This is a simple question all must know to do what is right today to guarantee a better future.
It is against this background, among many other things, that the proactive nature of the Social Security and National Insurance Trust (SSNIT) deserves commendation. The Trust embarked on a comprehensive campaign to sensitise the masses about the importance of social security.
The campaign
From Monday, September 5 to Friday September 9, SSNIT organised series of customer clinics in its quest to engage the general public and explain all there is as far as social security is concerned.
This year’s clinic was unique. Unique because SSNIT within the week organised a float and employers’ seminars to add spice to the entire event.
The aim was to create more awareness, that awareness the masses have to know of the operations of the Trust and to introduce to stakeholders the latest technologies deployed by SSNIT that would make contribution payment as well as benefit payments much easier for pensioners in the country.
Basically, the annual Customer Clinics are meant to bring the services of the Trust to the door steps of the public. Again, the customer clinics, “Hit The Street” campaigns, customer clinics and employers seminars are all well-planned and executed strategies by the Trust to moblise support from all workers in Ghana to contribute towards a sustainable fund that would provide them with some income support during old age, invalidity and also for their nominated dependants should they pass on before the age of 75.
Some of the enquiries made at all the events centred on change of beneficiaries, enrolment and benefit payment procedures. Potential contributors’ concerns were also addressed.
The SSNIT “Hit the Street Campaign” was designed to sensitise employers to their obligations towards social security payments and also to provide education on the new SSNIT Pension Scheme.
The Trust this year introduced the “Hit-The Street” campaign, a novelty, where staff went on floats in busy towns and streets, giving out information including flyers and wrist-bands on the SSNIT Pension Scheme.
SSNIT Staff from the eight Area offices and 50 branches in the country answered queries from curious and anxious employers, employees and also members of the public.
Employers seminar
At the employers seminars, employers or their representatives were introduced to the new technologies deployed by SSNIT such as the Online Contribution Report Submission and Validation.
Previously, employers submitted their contributions reports at SSNIT branches for validation before the payment advice is generated for payment at the cashiers’ point. The payments could only be made at the branch that registered the businesses.
Currently, employers can submit their contribution reports online, validate and generate the payment advice through the SSNIT Portal. They can then pay their contributions at the SSNIT partner-banks and contributors accounts are credited soon upon receipt of payment by the bank.
In other SSNIT administrative areas such as Takoradi, Tamale, Kumasi, Tema, and Accra South where similar activities took place, the organisers described the events as successful as they received a lot of enquiries from especially self-employed persons who want to contribute voluntarily.
Statistics
As at June this year, the Social Security Scheme has registered 1,265,88 Active Contributors, a total of 54,420 Active Establishments, and 163,20 Active Pensioners.
This notwithstanding, there is the need to enrol more contributors to the scheme to increase the level of investment of pension funds which would translate into the sustainability of the scheme.
So far, SSNIT has been making prudent investments of workers Social Security Tier One (1) Contributions under the National Pension Act 2008, Act 766. This has translated into the provision of the lowest pension of GH¢276, higher than the state monthly minimum wage. The highest monthly pension payment is about GG¢29,000.
Investments
The total investment portfolio of SSNIT increased from GH¢5.2 billion in 2013 to GH¢6.6 billion at the close of 2014.
This represents a positive variance of 27.9 per cent. The amount for the year under review is made of GH¢2.35 billion in equities; GH¢C3.61 billion in fixed income and GH¢640.51 million in alternative investments.
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According to its annual report for the year under review, the real return on investments of the Trust for 2013 was 16.90 per cent, which indicates that SSNIT has consistently exceeded actuarial valuation targets.
For instance, according to the 2011 external actuarial valuation on the scheme, at 3.25 per cent Real Return on Investment (RROI), the Fund could be sustained till the year 2032 and at 1.25 per cent till the year 2030.
Contrary to allegations which question the sustainability of the fund, the RROI clearly signals the viability of the Trust in the coming decades.
The Trust remains the largest single institutional investor on the local bourse and is also helping to nurture the development and sustenance of the capital market in Ghana.
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For instance, the Trust has investments in 22 out of the 36 listed companies on the local bourse.
For the financial sector investments alone, the Trust has investments in 18 companies.
The key one among them include Cal Bank where the Trust has 33.18 per cent shares; GCB bank, 29.81 per cent; HFC bank 26.14 per cent; Societe General, Ghana, 22.14 per cent; Ecobank Ghana Limited, 16.19 per cent; Ghana International Bank, 15.00 per cent; and Standard Chartered Bank where it owns 14.34 per cent.
Others are SIC Company Limited, 11.80 per cent; Enterprise Group, 6.13 per cent and CDH Holdings 1.30 per cent.
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It is also involved in housing development, both commercial and residential, student hostels across the country, as well as the energy sector, industrial estates, hospitality, transport and social investments to build a sound financial base for the fund.
Way forward
For many years, governments have become a thorn in the flesh of SSNIT. Although officials of the Trust are always tight lipped on how late or early the government releases funds, it is known that the releases from the government as payment of contributions of public sector workers is always in arrears. The amount, although unknown, is staggering. This affects the quantum of funds required for investments.
Although the rate of return on the investments of SSNIT is almost four per cent and declared sustainable, it could be far better and secure if governments will redeem their obligations on time.
The Trust in spite of that, is strong and viable by any means and the managers of the Trust deserve some commendation. It was in no doubt worthwhile because it will get people thinking and in the end, some recalcitrant ones will be transformed to join the scheme as part of their quest to secure a better future. Hard as it may, people in active service must not take this issue about social security for granted.
Against this background, the nationwide campaign must be sustained and should all stakeholders play their roles well by changing their wrong perception about the scheme, there will be more funds to invest.
Lastly, the Trust must also endeavor to continuously invest in viable projects that will return higher profits so pensioners can be paid what they truly deserve. — GB
Writer’s email; cb.okine@yahoo.com