Employment Minister moves to foil public sector strike over low SSNIT pensions

Business News of Monday, 10 August 2020

Source: thebftonline.com

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The Minister of Employment and Labour Relations, Ignatius Baffour Awuah, has made a last-minute attempt to foil the plans of 12 public sector unions to embark on a strike over what they term as low pensions being paid by the Social Security and National Insurance Trust (SSNIT).

The unions came together to form the Forum for Public Sector Registered Pension Schemes on June 10, 2020, and gave government a two-week ultimatum to address their concerns or they would lay down their tools.

When the issue was taken to the National Labour Commission (NLC), which invited all the parties for an amicable settlement of the matter on July 8, there was a last minute cancellation that moved the meeting to July 29. But on the scheduled date Mr. Awuah, the minister, wrote the NLC to grant a one-month extension for the ministry to engage all the parties involved to reach a consensus for amicable settlement by the NLC.

“We wish to inform you that the government side met to deliberate on the matter, and has started an engagement with leadership of the FORUM that is in its early stage. In view of this, we respectfully request an extension of one-month to be able to arrive at a consensus on the matter before our next appearance. We count on your uttermost corporation in this important regard. Please accept the assurance of my highest consideration.”

To the Forum, government coming to the table is a step in the right direction since they have been inundated with complaints from pensioners about the meagre amounts paid them when they proceed on retirement; hence their push for the increment.

They insist that even though the Social Security and National Insurance Trust (SSNIT) has paid the Past Credit of persons who went on retirement this year, some pensioners are feeling shortchanged; and therefore the Forum is demanding the formula for calculating the amount.

According to them, the Past Credit – which is a one-time benefit being paid pensioners who are retiring under the National Pensions Act, 2008, Act 766 – is not only meagre but also in clear violation of the Pensions Act.

The Past Credit is simply funds that remained with SSNIT after the coming into force of Act 766, which required the scheme to transfer 4 percent of pensioners’ funds to the second-tier fund managers. What this means is that the 17.5 percent of workers’ salary that was initially paid to SSNIT was slashed to 13.5 percent, with the remaining 4 percent paid to the fund managers.

However, workers who had already paid the 17.5 percent to SSNIT before the Act 766 came into force on December 31, 2009 did not have their accumulated 4 percent transferred to fund managers by SSNIT. Subsequently, SSNIT proposed that the Past Credit up to December 2009 should be computed using 50 percent of the annual prevailing Treasury bill rate, and the interest from January 2010 also computed using 50 percent of the 91-day Treasury bill rate compounded quarterly.

Speaking at a press conference held by the Forum, its chairman, Isaac Bampoe Addo, said an analysis of the amounts paid pensioners does not tally with SSNIT’s claims. To him, even if it was the case, there should have been some definite deliberation between the Pension Reform Implementation Committee and the Trust that would receive approval from the NPRA’s board before payment – but such was not the case.