SSNIT unhappy with dishonest employers

The Director General of the Social Security and National Insurance Trust, (SSNIT) Mr. Kwasi Osei has warned that the trust will clamp down on those employers who under declare the salaries of their employees and pay very little SSNIT contributions.

“Some of them record as low as ¢34,000 a month and expect their workers to earn huge pension after retirement”, he lamented at a second stakeholders forum on Wednesday. He emphasized that contribution should at least be based on the minimum wage and hoped some of the recommendations by the presidential commission on pension would go a long way to address such issues.

He announced the Loan Trust established to replace the student loan scheme will take over the SSNIT Student Loan scheme when it becomes fully operational.
However, he said SSNIT will be responsible for disbursing funds to continuing students and also recover money due from loan beneficiaries.

In the financial year 2005, the trust is reported to have improved on its data collection and this enabled it to process over 84% benefit applications, thus improving the processing time for benefits to an average of 28 days.

The Social Security Fund also continued its steady growth as it ended the financial year with a fund size of ¢9.29 trillion, representing almost 5.81% increase over the previous year’s fund value of ¢8.78 trillion. This growth was attributed to the combined effect of the increase in contributions collected and investment income.

Contributions collected increased by 17.2% from ¢1.63 trillion to ¢1.91 trillion in the year under review. Total benefit payments to members increased from ¢447.35 billion to ¢630.24 billion, an increase by 40.9%.

Mr. John Saka Addo, Chairman of the Board of Directors, said the biggest challenge for the trust now is the prompt crediting of pensioners’ accounts with their monthly benefit entitlements by the banks.

“We wish to take this opportunity to appeal to the banks to be sensitive to the problems to the plight of the pensioners.”
In June 2005, the trust commenced the piloting of a scheme that targeted the informal sector, which covered Accra Central, Koforidua, Takoradi and Kumasi.
A distinct scheme made up of two accounts that is a withdrawal account and a retirement account was piloted at those centres. The scheme which is expected to be piloted over a two year period, and subsequently launched nationwide based on its performance, is said to have had encouraging results with a total of 6,577 members. The trust also has approximately 7,000 voluntary contributors.

At the forum participants called on SSNIT to intensify its campaign on voluntary / informal contribution. They emphasized the need to tap from the sector which has a chunk of the working population in the country.

According to the Vice Chairman of the Accra Central Shop Owners Association, Mr. John Owusu Duodu, members are making profit and could easily make huge contributions. “The informal sector holds the potential to increase contributions to the social security fund and so I am appealing to SNNIT to encourage traders to sign up with the scheme.”