Former Attorney-General Betty Mould-Iddrisu has raised concerns about the Social Security and National Insurance Trust (SSNIT), stating that it is on the brink of collapse.
This comes after the revelation that SSNIT reserves are predicted to be completely depleted by 2036.
During an episode of Hot Issues on TV3, Madam Mould-Iddrisu expressed shock at the news, citing a prediction by the International Labour Organisation (ILO) that SSNIT’s reserves will run out by 2036. The ILO report also stated that by 2029, the total income of SSNIT will no longer be sufficient to cover annual expenditures, including benefit payments to pensioners.
The report further emphasized that the reserve ratio, which is the end-of-year reserve over the annual expenditures, will decline from 3.4 to 0 between 2021 and 2036. This means that SSNIT will not be able to pay pension benefits if there are no contributions, investment income, or other income.
One of the critical reasons for this impending collapse, according to the valuation report, is the delay in payment by the government.
As of December 31, 2021, the government owed SSNIT GH¢6.9 billion, which accounted for 73.7% of the total indebtedness. This late payment of contributions has led to a 1.3% drop in expected returns on SSNIT’s investments.
The report also highlighted that the government’s delay in payment shifts a significant portion of the cost to the private sector.
If this trend continues, SSNIT’s reserves will be depleted by 2036, putting pension benefits at risk for prospective retirees.
