Former Attorney-General Betty Mould-Iddrisu has expressed concern over the apparent collapse of the Social Security and National Insurance Trust (SSNIT).

She finds it alarming that SSNIT's reserves are on the brink of depletion, describing the revelation as shocking.

“It’s shocking, SSNIT is evidently on the verge of collapse,” Madam Mould-Iddrisu said on the Hot Issues on TV3 Sunday, April 28 with Kemmini Amanor while commenting on a prediction by the International Labour Organisation (ILO) that the reserves of SSNIT are going to be completely depleted by 2036.

According to the International Labour Organization (ILO), the total income, comprising contributions, investment income, and other revenue sources, will become insufficient to cover annual expenditures, including pension payments to retirees, by the year 2029.

“Starting in 2029, total income (contributions, investment income and other income) is no longer sufficient to pay for annual expenditures.“The reserve starts to decrease. During the year 2036, the reserve drops to zero” the research emphasised.

SSNIT, with no alternative payment methods, will rely on its reserves to meet payment demands, thus initiating the depletion process. According to the valuation report, this trend is expected to persist until 2036, when reserves are projected to diminish to zero.

The reserve ratio, indicating the year-end reserve compared to annual expenditures, declines from 3.4 to 0 between 2021 and 2036. Consequently, without contributions, investment income, or other revenue streams, the scheme will be unable to cover pension benefits.

The valuation report attributes this predicament primarily to government payment delays. As of December 31, 2021, government arrears accounted for 73.7% of SSNIT's total indebtedness of GH¢9.35 billion. This late payment significantly affects SSNIT's expected investment returns, resulting in a 1.3% decrease, as highlighted in the report.

According to the study, “Past experience suggests that, by not paying on time and not paying the interest income on delayed contributions, the Government shifts an important part of the cost to the private sector”.