19.2 for enhanced sustainability

percent of salaries for employees totalling 18.5percent, 2.5percent of the salaries are passed on to the National Insurance Scheme, 5.0 percent of salaries are passed on to the second tier and remaining 11percent of salaries is available for SSNIT, the 2020 Auditor-General’s report captured.

be moved up to 19.2percent, in the short to medium term for increased sustainability.” he told members of the Public Accounts Committee,(PAC) when management of the trust appeared before the committee last Wednesday.

The Social Security and National Insurance Trust (SSNIT) has appealed to government to review its contribution rate it is taking from workers, from 13.5percent to 19.2percent for increased sustainability.

SSNIT is a statutory public Trust charged under the National

Pensions Act, 2008 Act 766 with the administration of Ghana’s Basic National Social Security Scheme.

Under the new Pension Schemes (Act 766 2008 and Act 833,2014) contributions are 13percent of salaries for employers and 5.5

According to Dr.John Ofori-Tenkorang, the Director-General of SSNIT, the contribution rate coming to SSNIT was reduced, from 17.5 to 13.5percent adding that there were supposed to be commensurate reduction in benets but “it became clear that the contribution rate we are taking now needs to be looked at, the external actuaries recommended that the contribution rate should

The 2020 Auditor-General’s report urged management to sustain the future of the trust, revealing that they noted from the referred actuarial valuation report that, the recommended sustainable rate of 19.2% is substantially higher than the current contribution rate of 11%. Further, the auditors noted from their analysis of the Trust’s 2018 Financial Statements that, the proportion of contribution used to pay bene ts in 2017 and 2018 is in excess of 90% which implies that investment income will be used in the very near future to pay bene ts.

Action Taken

The proposed strategies to increase Investment Income and Control Cost, according to Dr.Ofori-Tenkorang, includes; rebalance investment portfolio, increase investments in xed Income and reduce position in equities, sell o housing stock to reduce investment in real estate.

Others are re-invest proceeds from exited equities and sales of real estate assets and invest new allocations of funds in xed income assets, particularly tradeable government bonds.

Also, he explained the rationale behind the low contribution rate, stating that “because our accounts are prepared on a cash basis, any arrears that needs to be collected is not factored into these projections.

We also need to take a look at our investments, today we talked a lot about investments, being able to streamline those investments and increasing return will also help reduce how much we have to change the contribution rate by and then even in our operations, the way we control our cost and I think the audit report is showing that we have embarked on a cost control measure in terms of administrative cost and also how we mobilise our additional revenue which you [may have heard that SSNIT is now embarking on a nationwide campaign to roll the self-employed to let every worker know that they can join SSNIT, so we are taking all these actions to increase revenue, rebalance our investment portfolio and monetise non-performing investments and to rationalize our cost base.”