SSNIT increases pension benefits by 11 percent

Business News of Wednesday, 9 January 2019

Source: citibusinessnews.com

2019-01-09

play videoDirector-General of SSNIT, John Ofori-Tenkorang

The decision, according to SSNIT was taken after considering the rate of increase of prices of goods and services, adjustment in public sector salaries, as well as available funds with the company.

Speaking at a press conference, the Director-General of SSNIT, John Ofori-Tenkorang explained that low pension beneficiaries will get some relief due to the increase.

Mr. Ofori-Tenkorang explained that “The 2019 indexation was pegged at 11 percent with 9 percent as a fixed rate and 2 percent being redistributed as a flat amount of GH¢15.89 to benefit those earning lower pensions”.

He continued that the “redistribution is an adjustment of the overall indexation rate to cushion members on low pensions in line with the solidarity principle of social security. The extra cost to be incurred by the Trust for existing pensioners in 2019 is 212.16 million cedis”.

Providing some more details, he observed that the new minimum monthly pension for 2019 is GH¢300 cedis and compares very favourably with the national daily minimum wage which is GH¢287.55.

Mr. Ofori-Tekonrang stated that indexation is a technique to adjust pension payments in order to maintain the purchasing power of pensioners.

He explained that pensions are normally indexed to wage inflation or some other rates such as price inflation.

“The factors that influence indexation are average change in the Consumer Price Index. Average salary growth of active contributors and financial implication on the fund”.

The legal provisions for the indexation is found in National Pensions Act, 2008 section 80 and states that “the Trust shall annually review the pension payment which shall be indexed to wage inflation rates of active contributions or another rate determined by the Trust in consultation with the Board of the Authority”.

Mr. Ofori-Tenkorang assured that the management of SSNIT will continue to work hard to guarantee positive annual indexation for pensioners bearing in mind the long term sustainability of the scheme.

SSNIT is committed to improving its service delivery and consolidating the gains made within the last two years to accelerate its aim of becoming the pensions administrator of choice.

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