Government to streamline operations of SSNIT

The Minister for Finance, Yaw Osafo-Maafo says Government proposes to streamline the operations of the Social Security and National Insurance Trust (SSNIT) to make it more focused and responsive to the interests of its beneficiaries.

Government is also to encourage the development of other schemes and to make tax breaks for those, who can afford to take out private pensions to do so to supplement the SSNIT scheme.

Mr. Osafo-Maafo was answering a question in Parliament posed by the MP for Afram Plains South, Hon. Kwakye Addo as to whether his ministry would consider encouraging alternative pension schemes to break the monopoly that SSNIT enjoys.

The Minister said SSNIT has over the years become the bastion of corruption and political patronage and deflected from its core function of safe investment and custody of the assets of workers and ensuring maximum returns.

In view of the mismanagement and corruption that have bedeviled the operations of SSNIT and the need to protect workers when they are most vulnerable, the Government says it is studying the issue of workers pension rights and alternative schemes.

The Finance Minister said the study is to recommend changes in the law as well as the establishment of an appropriate regulatory framework to ensure that the pension industry is well organized and regulated to ensure maximum protection and benefits for workers. He added that SSNIT had been turned into a venture capital fund, entering into extremely risky investments and ventures and used as the second central bank to the previous government.

Osafo-Maafo said the government has initiated measures to streamline SSNIT's operations, which include dissolving the SSNIT Board and constituting a new one to streamline its management and to ensure that investment policies are re-focused towards the achievement of maximum returns and benefits to contributors.

The Minister said for contributors, who cannot afford supplementary pension schemes, the way forward is to amend the SSNIT law to allow workers to partially opt-out of the SSNIT scheme.

"Workers should have the option to suggest that a higher percentage of their contribution including their employers contribution should be paid into a private scheme while the remaining contribution stays with SSNIT".

By this arrangement the worker would now be able to compare the benefits of the two schemes and may be in a position to re-adjust the percentage contributions to maximize his returns and the option of partially opting out would hopefully compel SSNIT to be competitive.

Meanwhile the Tripartite Committee is to be mandated to review the matter of End of Service Benefits (ESB), the Minister told Parliament. The committee would determine whether or not the benefits should be restored and the basis for determining workers' entitlements.

The previous government suspended the ESB with effect from December 31st 1990.

The Finance Minister said some of the considerations that precipitated the suspension of the ESB still remain and government has decided that as a follow-up to the agreement on the minimum wage, the Tripartite Committee involving the Government, Employers and Organized Labor should be made to review it.

Some of the factors that necessitated the suspension of benefits were the magnitude of the total amount involved and its overall impact on the national economy, particularly on the viability of many of the private sector enterprises, creation of job opportunities and government borrowing from the domestic market and inflation.

Dr Osafo-Maafo said an economic management team is currently working on it and it is expected that discussions would continue up to the end of June.

The Minister noted that in the interest of job creation and to protect the private sector enterprises, the issue of ESB needs critical analysis based on facts and figures from all the stakeholders to arrive at a consensus.