The International Labor Organization (ILO) provides that the Ghana Social Security and National Insurance (SSNIT) reserves will be is sold out by 2036.
Details
This was revealed in a actuarial valuation study of the viability of the Social Security and National Insurance Trusts (SSNIT).
According to the ILO, total income incl contributions, investment income and other incomewill no longer be sufficient to pay annual expenses, including pensioner benefit payments until 2029.
What they say
“From 2029, the total income (contributions, investment income and other income) is no longer sufficient to pay the annual expenses.
“Inventory is starting to dwindle. In the year 2036, the reserve drops to zero“, the survey pointed out.
Digging deeper
The SSNIT will have to depend on reserves to meet the payment demand leading to the initiation of the depletion process. This is likely to continue until 2036 when the reserve will be reduced to zero.
The reserve ratio, which is the year-end reserve over the year’s annual spending, moves from 3.4 to 0 between 2021 and 2036.
This means that the scheme can no longer pay pension benefits if there are no contributions, investment income and no other income.
Between the lines
The details of the valuation report showed that the critical cause of this development is the delayed payment by the government.
By The Numbers
From GHC 9.35 billion total debt at SSNIT from 31 December 2021, 73.7% translates to GHC 6.9 billion was due to late levy payments by the government.
This leads to a 1.3% drop in the expected returns on the investment made by SSNIT, the report pointed out.
According to the study, ““Past experience shows that by not paying on time and not paying interest revenue on late contributions, the government is shifting a significant part of the cost to the private sector.”
Source: Joy News
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