Mr Reynolds O. Tenkorang, the General Secretary of the Health Services Workers Union (HSWU), said the perception that the SSNIT Pension was low due to low salaries of contributors was not the true reflection of the issue.

He said the Social Security and National Insurance Trust (SSNIT) Pension was low because of misapplication and misinterpretation of the law by the Trust, which had resulted in low payment of pensions thus making the contributors/members worse off.

He said the SSNIT Pension was a creation of law, PNDC Law 247 of 1991, which had set up the parameters for qualifying conditions and computations, making SSNIT Pension a defined benefit scheme.

Mr Tenkorang, speaking at the just-ended National Executive Committee (NEC) meeting of the Communication Workers’ Union (CWU) in Accra, said a defined contribution scheme was a type of pension in which the employer, employee or both made contributions on a regular basis.

He said the formula of computation of benefits of Defined Benefit Scheme were clearly set out by Law, predetermine by formula and nothing else.

“Under section 211 of Act 766, Defined Benefit Scheme means a pension scheme providing a defined benefit formula for calculating benefit amounts without regard to contributions.”

The minimum pension, he said, was based on average annual salary for the three best years of a member during his/her working life, yet SSNIT eliminated annual three months and replaced it with 36 months salaries, contradicting the Law.

He said issues of contention involved annual salary, early retirement reduction factor, annuity factor and wrong data.

Mr Tenkorang said the position of SSNIT was that benefits were not based on assumed annual salaries but actual insured earnings received.

He said benefits were based on basic salaries of members and that to calculate one’s pension “multiply one’s best 36 months (3 years) average

salary by your “pension right,” thereby removing annual from the formula as stipulated in the Law.

“SSNIT picks 36 months salaries prior to retirement, adds them up and divide into three and declare each one as an annual salary.”

“The salaries used by SSNIT are not annual salaries but a collection of 36 months salaries preceding retirement, which will definitely be lower than using the annual three months to calculate the pension.”

He said the position of the HSWU was that annual salary was remuneration guaranteed, negotiated and fixed to be paid to the employee.

Mr Tenkorang said the wrong interpretation of what constitutes annual salary (36 months), insertion of early retirement reduction factor and annuity factor on lump sum are strange to the PNDC Law 247 and must all be scrapped.

The Law, he said, unequivocally state when to use “annual, months, and days (Section 16 (1), 22 (1) (2) (3), 23 (1b) and called on workers to abreast themselves with the computation of Pension to avoid being cheated after rendering dedicated service to the country.