The Social Security and National Insurance Trust (SSNIT) has been recognized by the National Pensioners Association, a body that advocates for retirees’ rights in the nation, for boosting monthly pension payments by 25%.
The increase, which will be applied to all pensioners on the SSNIT pension payroll as of December 31, 2022, will take effect in January 2023 and was announced by SSNIT Director-General Dr. John Ofori Tenkorang.
After a meeting with the Director-General, the Association expressed its “excitement” on the increase in pensions while urging the government to put its constituents’ wellbeing first.
The Association’s General Secretary, Stephen Boakye said: “If you are given a huge amount today and tomorrow we do not get anything, how will pensions remain sustainable for generations to come?”
He added that SSNIT is committed to being “very prudent” in managing the pension fund; and that the decision to increase pensions was made in consultation with the National Pensions Regulatory Authority (NPRA), in line with Section 80 of the National Pensions Act 2008 (Act 766).
The increase in pensions will be applied as a fixed rate of 19 percent, with an additional redistributed flat amount of GH¢73.58. According to SSNIT, this redistribution is a mechanism applied to the indexation rate to cushion low-earning pensioners in conformity with the solidarity principle of social security. As a result, the effective increase in pensions will range from 19.05 percent for the highest-earning pensioner to 43.53% for the lowest-earning pensioner.
In addition to increasing monthly pensions, SSNIT has also increased the maximum insurable earnings for 2023 to GH¢42,000 from GH¢ 35,000. This increase was made in consultation with the NPRA in accordance with Section 63 (3) of the National Pensions Act 2008 (Act 766). The minimum insurable earnings have also been increased from GH¢365.33 to GH¢ 401.76, following the raise in National Daily Minimum Wage.
Dr. Tenkorang also addressed concerns about sustainability of the pension fund. He acknowledged that while the 25 percent increase in pensions is significant, it is important to also consider the fund’s long-term sustainability.
He also highlighted the redistribution mechanism applied to the indexation rate. He explained that this redistribution results in some pensioners receiving an increase of more than 25 percent, with the highest increase being 43.53 percent for the lowest-earning pensioner.
