Government to reactivate informal sector pension - Finance Minister

The Minister for Finance, Ken Ofori Atta, has disclosed that government is determined to ensure the reactivation of the SSNIT informal sector pension scheme that was put on ice by the previous National Democratic Congress government.

The Minister for Finance, Ken Ofori Atta, has disclosed that government is determined to ensure the reactivation of the SSNIT informal sector pension scheme that was put on ice by the previous National Democratic Congress government.
 
According to Mr Ofori Atta, this will include broadening and deepening pension coverage in Ghana which could envelope the cocoa pension scheme as well, and help alleviate poverty in the retirement period of Ghanaians who work in the informal sector.

The Finance minister made this known when he inaugurated the 13-member reconstituted board of Trustees of the Social Security and National Insurance Trust yesterday.

Mr Ofori Atta also revealed that government would negotiate and make prompt payment of all pension arrears, adding “government will also assist the National Pension Regulatory Authority in enforcing compulsory enrolment by requiring proof of enrolments similar to what is required of SSNIT enrolment in order to meet other statutory obligations such as government contracts and customs approvals.”

He explained that such collaboration between the board and National Pension Regulatory Authority, and with government assistance, would ensure the success of SSNIT.

Mr Ofori Atta observed that major issues confronting management of pensions in Ghana were investment of pension funds, the limited availability of investment options and mandatory investment of contributions in low yielding government bonds in the face of high inflations which create diversification for the scheme.

“Notable among challenges confronting SSNIT are the reduction in SSNIT contributions after the introduction of the three tier contribution pension scheme in January 2010,” the finance minister stated, disclosing that available data indicates that 2016 contributions  were less than 2015 contributions.

He added: “The contribution for the year 2016 was GHC1.86 billion, about 12% less than 2015, indicating a rather steep decline. In addition to that, the benefits were up GHC1.75 billion in 2016, indicating a huge jump from 2015 and when we look at SSNIT investment portfolio and performance, a closer look rather reveals a poor portfolio and over the years has yielded returns that are below expectations.”

Mr Ken Ofori Atta admitted that government was caught in a difficult situation as a result in decline of contributors, increasing pension benefits and non-performance of investment portfolios.

“So, this is a huge task we need to avert and turn around. So overcoming these challenges are crucial as it will ensure and improve the trust that the people of Ghana have in the scheme,” he said.

He, was, however quick to add that government was partly to be blamed for the issue, “because government has over six hundred million cedis of payment that has to be added and we will work with management and the board to structure the scheme in a way that we honour this obligation.”

He urged the board members to act in the interest of contributors of the scheme and represent the collective interest of the tripartite members of the board, labour, employers and pensioners and the state since Ghanaians look up to social security investments benefits.

“It is very gratifying to have men and women of such great expertise to avail yourself to ensure the prosperity and robustness of the trust.

Currently SSNIT has over 170,000 pensioners on the roll and about 1.3 million people contributing to it on monthly basis,” Mr Ofori Atta said.

Board Chairman of SSNIT, Kwame Addo Kufuor, pledged that the board would carry out their duties to the best of their abilities, noting that SSNIT, if well managed, would be a formidable institution that could assist the government in it serious attempt to resuscitate the national economy.

“SSNIT could also act as a magnet to attract massive foreign direct investment in to the country. Again SSNIT could partner the private sector to grow significantly and establish numerous enterprises which would become avenue of employment for our teeming young compatriots in search of job.

It is the determination of the new board to direct SSNIT along such a path so that the increased prosperity engendered would justify the confidence and the trust reposed in us by His Excellency the president and our sector minister,” Mr Addo Kufuor said.

Members of the board include Abena Osei-Asare, Alex Frimpong, Daniel Acheampong, Joshua Ansah and Prince William Ankrah.

The rest are Mahamadu Assibi Azonko, David Ofori Acheampong, Benjamin Odotei Asumang, Beatrice Zakpaa Vib-Sanziri and John Ofori Tenkrang, who is the Director General of SSNIT.