GHc300 earning pensioner on SSNIT now receives GHc430 with new 25% jump in payments

Director-General of SSNIT, Dr. John Ofori-Tenkorang
Director-General of SSNIT, Dr. John Ofori-Tenkorang

Pensioners on the Social Security and National Insurance Trust (SSNIT) scheme can enjoy a new 25% indexation rate for 2023 raising a GHc300 benefit to GHc430,15.

The jump, a 150% increase on last year’s figure of 10% indexation also sees the highest earning pension of GHc142,564.7 jump to GHc169,725.89 from Jan. 2023.

The first meeting of the year headed by Director-General Dr. John Ofori-Tenkorang also saw leadership of pensioners association, SSNIT Chief Actuary-­­Joseph Poku and other SSNIT leaders in session.

Dr. Ofori-Tenkorang reiterated the availability and accessibility of SSNIT’s Corporate Affairs to address concerns.

In the challenging economic time Ghana finds itself with secondary market being nonexistent, many have asked how the scheme was managing finances regarding investment and anticipating managing payments.

We pay benefits via two sources. We collect contributions monthly but since there’s a gap, some benefits come from existing workers and return on investments, the SSNIT Director-General stated.

2023 SSNIT indexation rate  press release

We anticipate using contributions to pay benefits and rely on dividend income and income from fixed income instruments to meet current obligations,” he added.

In the event that there’s excess money, they are to be deployed to fixed income instruments with Dr. John Ofori-Tenkorang noting “we have some uncompleted real estate projects that needs funding to complete so some will go there.”

Cost of the new indexation is GHc4.3 billion according to Mr. Poku. He added the differential from last year’s figure is GHc850 million.

The scheme managers say the indexation or increase takes into account the average inflation of the year.

Despite the massive deviation from trend and with managers of the economy pledging to bring inflation to double digits or better still a single digit, the SSNIT scheme managers note that a jump from last year’s 10% indexation rate to 25%, a 150% leap is commendable.

The Director-General drew attention to the redistribution exercise that will ensure almost 70% of pensioners get above 25% so beneficiaries of the low end will get 43.5% which is close to the inflationary number.

SSNIT Chief Actuary Joseph Poku in middle
SSNIT Chief Actuary Joseph Poku in middle

In 2022, the Social Security and National Insurance Trust (SSNIT) leadership embarked on a vigorous campaign engaging media people, the self-employed, Christian as well as Muslim groups on the benefits of insuring earnings. That drive resulted in 214,000 new members enrolling on the scheme.

234,000 pensioners are on the scheme’s roster as at December 2022. The figures will see new additions this year as new beneficiaries are rolled on the scheme.

Regarding this year, the call is for employers to pay their employees’ contribution timeously and for the self-employed to also insure their earnings. As happened last year, the scheme has served notice it will take defaulting persons and organizations to court especially when Saturday courts have been set up to sit on regulatory breach cases.

SSNIT has an obligation to pay employees and since the scheme cannot pay such employees with funds of other workers, it will compel the employers to honour their obligation even though there are reminders before summons are served,” Dr. Ofori-Tenkorang submitted. He added employers are spoken to so that by 14th of every month SSNIT contributions should be paid.

As was done last year, the scheme managers intend preaching about the advantage of SSNIT being the only pension scheme to pay you until you die as it assumes longevity risk which the other schemes do not.

Regarding SSNIT being only partially funded, the schemes Director-General explained “the contributions you pay and the benefits we pay you show there’s a gap. As the contributions by themselves do not meet the benefits. With SSNIT, the next generation pays part of your benefit.”

Managers of the SSNIT scheme
Managers of the SSNIT scheme

A challenge of very busy persons was making time to pay contributions. This year, the scheme’s electronic or Mobile Money (MOMo) platform that is e-levy exempt is ready for contributions to be paid through. This, the scheme managers say is an intervention largely for the self-employed and those in the informal sector.

Committed to paying benefits timeously to legitimate pensioners on the scheme, the indexation will increase cost Dr. Ofori-Tenkorang acknowledged but he noted it also meant running a tight ship by increasing reach and revenue and paying pension to only those on the scheme legally.

He warned some names will be ejected from the roster for failing to update biometric credentials yearly to show proof of life.

For pensioners who cannot visit SSNIT offices, they should call and scheme officials will authenticate and update their records,” he added.

Chief Actuary, Joseph Poku for his part noted indexation of pension for 2023 or increase in pension payment is a technique used to adjust pension payment to maintain purchasing power.

It’s a legal requirement for the Trust to undertake annually he added citing section 80 of the National Pensions Act 2008 (Act 766).

Factors of indexation include wage inflation, change in CPI for the year (According to the Ministry of Finance as at Sept. 2022 annual average inflation was projected to be 20.5%), liquidity position and long-term sustainability of the scheme.

The indexation rate for 2023 is 25%. This represents a 150% increase on last year’s figure. This rate nonetheless will not be applied across board as there are low earners. The redistribution helps to cushion low earning pensioners in line with the solidarity principle of social security. The 25% Mr. Poku continued is then split into 19% fixed rate where every pensioner gets this and the remaining 6% is redistributed.

SSNIT scheme managers
SSNIT scheme managers

The total number of pensioners on the payroll is taken and then the 6% is converted to cash, divided by total number of pensioners and added to the 19%. That’s how the redistribution is worked according to the Chief Actuary.

This enables those of the low side enjoy a higher indexation rate. The 6% when redistributed comes to GHc73,58. With this, 69% of pensioners will receive at least 25% increase in their pensions.

So the lowest pensioner who last year received GHc300 now receives GHc430,15. This represents 43.53% increase on the previous pension.

The highest earning pensioner who was earning ghc142,564.7 is now going to receive pension from Jan. 2023 of GHc169,725.89 till 2024 where a new indexation is done. He receives effective rate increase of 19.05%.

The cost implication shows that for 2021 to 2022, the increase was 25%, however from 2022 to this year the increase is a whopping 179% by way of cost to pay the indexation according to Mr. Poku.

 The projected benefit expenditure for SSNIT in 2023 is around GHc5 billion. The benefits expenditure includes statutory payments including pensions – survivor’s pensions, immigration, lump sums etc.

by michael eli dokosi/


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