The International Labour Organization (ILO) has issued a stark warning regarding the sustainability of pensions provided by the Social Security and National Insurance Trust (SSNIT).
According to their projections, SSNIT may face significant challenges in meeting pension obligations in the future, potentially leaving retirees without benefits.
In a recent report, the ILO highlighted concerns about the long-term financial viability of SSNIT’s pension scheme.
Their projections suggest that in 12 years’ time, which is the year 2036, SSNIT may struggle to fulfill pension payments.
It must be noted that as at December 31, 2021, SSNIT records showed a total debt of GH₵9.3 billion, with GH₵6.9 billion owed by the government itself.
The government debt represents around 75% of SSNIT’s total indebtedness, including overdue contributions and accrued interest.
Significant government debt has led to an annual decline in SSNIT’s investment returns of 1.3%, limiting the funds available for investment.
Data from 2009 to 2020 indicates that total contributions have been less than the cost of benefits and operating costs, amplifying pressure on the pension plan.
SSNIT’s average return on total assets over the past 12 years has been a meager 0.9% after adjusting for inflation.
Delays in government payments of deducted pension contributions exacerbate SSNIT’s financial challenges.
The sustainability of SSNIT is in danger, according to warnings from the International Labour Organization.
This alarming forecast underscores the need for urgent action to address the financial sustainability of SSNIT and safeguard the retirement security of workers.
