Parliament was urged to urgently amend pension laws to ensure the financial sustainability of the Social Security and National Insurance Fund (SSNIT) for the benefit of present and future generations.
The main proposals are an upward revision of SSNIT’s current contribution by 11 percent and a law requiring the scheme to submit its actuarial valuation reports to Parliament for review in order to prevent the scheme from becoming insolvent.
It has also been proposed that people with strong financial and investment backgrounds be appointed to the SSNIT board, while the government is also working to pay debts it owes to the trust.
These were included in a report of research conducted on pension sustainability by the African Center for Retirement Research (ACRR), a nonprofit think tank on policy research.
The research aimed to help shape policy in the areas of social protection, retirement and pensions.
Sharing the report’s findings at a press conference in Accra yesterday, ACRR Executive Director Mr. Abdallah Mashud called on the National Pension Regulatory Authority (NPRA) and SSNIT to speed up the process of ‘Development of administrative and operational expenditure guidelines that regulate trust spending in the best interests of the Ghanaian worker.
He said changes in demographic and economic factors over the past decades are creating serious sustainability issues for pension systems around the world, from which Ghana is not excluded.
To meet the challenges and thus prevent the collapse of public pension systems, he said, governments and policymakers in other parts of the world have embarked on the necessary legislative reforms.
The Executive Director said Ghana could not afford to be a loser, hence the need for the necessary reforms to make the program sustainable.
Referring to Article 53 of the 2008 National Pensions Act (Act 766), Mr. Mashud suggested that an external actuarial valuation of the SSNIT scheme be carried out every three years.
He said the last two actuarial valuation exercises carried out in 2014 and 2017 by the International Labor Organization (ILO) and the Actuarial Department of SSNIT indicated that the scheme faced a danger of medium to long-term sustainability. term.
âThe 2014 assessment not only certified that the current SSNIT plan assets, as well as future contributions, will not be sufficient to pay all future benefits and administrative and operational expenses during the projection period, but it also predicted that the fund’s reserves were expected to run out in 2042, âhe said.
Fight against imbalance
Mr Mashud said it was on the basis of the analysis of the two actuarial valuation reports that his team made proposals to parliament, policymakers and all stakeholders in the scheme to take the necessary steps to remedy to the imbalance of social security finances by parametric and legislative means. reforms to maintain full payment of benefits on a timely basis to current and future beneficiaries.
He noted that the factors that had affected the scheme, based on actuarial opinion, were economic and demographic, over which there was no control, while the poor performance of investments, high government indebtedness to the trust and the high administrative and operational costs could be corrected.
Mr Mashud said the actuarial report also proposed increasing the retirement age from 60 to 62 over a 12-year period, from 2025 to 2037, to have a positive impact on the financial sustainability of the scheme.
“The ACRR believes, however, that given the SSNIT retiree post-retirement mortality model, increasing the retirement age by two years will result in the death of more serving members. “, did he declare.
To address the solvency concerns of the SSNIT scheme, he called on Parliament and other relevant stakeholders to consider the recommendations of the actuarial reports and initiate discussions to address the scheme’s funding shortfalls.
The President of the National Pensioners Association (NPA), Mr. Sesi Seth Ametefe, said the cost of pensions was increasing around the world due to changing demographic and economic factors, including rapidly aging populations.
Therefore, he said, the NPA wanted policymakers to start examining the various pension reform proposals in order to improve the long-term sustainability of the SSNIT scheme.
Mr. Ametefe commended the current administration of SSNIT for the retiree payroll cleanup exercise which improved the mismatch that existed between plan assets and liabilities.
Nonetheless, he warned that it was not enough for SSNIT to simply deactivate NPA members from the payroll but to go further to confirm the state of life of affected members.
He noted that recent reports indicated that of the 41,508 deactivated retirees, only 17,175 returned to the payroll.
âThis seems to suggest that over 18% of the deactivated members who existed on the payroll have died,â he added.
The statistics, he said, are alarming and have called on SSNIT to somehow confirm the state of life of retirees.
ACRR board member Ms. Mawunyo Yakor-Dagbah, who is also president of the Ghana Federation of Disabled People’s Organizations, called on SSNIT to include disability status and type in its process. ‘member registration.
This, she said, would facilitate the federation’s drive to create disaggregated data on people with disabilities, adding that SSNIT could be a reliable source of data for effective formulation of policies and programs for people with disabilities then. that the country is moving towards social and economic inclusion in all facets of human existence.