SSNIT financial reserves may be depleted by 2036 - ILO warns

The International Labour Organisation (ILO) has warned that the Social Security and National Insurance Trusts (SSNIT) in Ghana could run out of funds by 2036.

As reported by myjoyonline.com, a study found that SSNIT's income will not be enough to cover its annual expenditures starting in 2029, leading to a gradual depletion of its reserves.

By 2036, the reserve ratio, which compares the end-of-year reserves to the year's total expenditures, is expected to fall from 3.4 to zero.

“Starting in 2029, total income (contributions, investment income and other income) is no longer sufficient to pay for annual expenditures.

"The reserve starts to decrease. During the year 2036, the reserve drops to zero,” the report stated.

This situation arises mainly because the government has been late in making its contributions.

As of the end of December, 2021, the government owed SSNIT GH¢9.35 billion, with late payments accounting for GH¢6.9 billion of this debt.

The delay in government payments has also reduced SSNIT's investment returns by 1.3 percent.

The report suggests that the government's failure to pay on time has effectively transferred a significant financial burden to the private sector.

“Past experience suggests that, by not paying on time and not paying the interest income on delayed contributions, the government shifts an important part of the cost to the private sector,” the study stated.

ID/NOQ

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