The Social Security and National Insurance Trust (SSNIT) has dismissed reports that the fund faces imminent collapse over concerns of operational challenges.
According to the pensions’ scheme, it has instituted measures to deepen its financial sustainability and meet potential increase in benefit claims.
“As a defined benefit scheme, it is based on a certain formula one is such that if you do a certain minimum number of contributions, you get a certain amount of money and the rest become extra.
“If the scheme is fifty years now and the minimum that you will need to contribute is twenty years, the observation will be that a lot more people may have contributed beyond the twenty and therefore payments for their claims starts during their retirements will start from the maximum,” General Manager of SSNIT, Ernest Thompson told Citi Business News.
“For a defined pension scheme such as SSNIT, it operates in a way that more benefits are paid than inflows. But when such occurs, managers will have to make a decision whether to increase contribution rates or reduce benefits,” he added.
Incoming Vice President, Dr. Mahamudu Bawumia prior to the general elections warned of some dire consequences if the current course of SSNIT is not reviewed.
His comments also followed a World Bank actuarial valuation report that indicated that the fund will become a cash flow negative in 2019 and all assets will be used up by 2031.
Though Mr. Ernest Thompson in his reaction admitted that the reports have over the years helped shaped the strategy of SSNIT, he further explained to Citi Business News the scheme is robust to withstand any of such pressures.
“But the scheme is very solid, sound and it has got assets over nine billion cedis, if even push comes to shove, we will have to sell off all our assets we should be able to get over that; considering even how much we pay in a month as claims,” he remarked.
SSNIT launches biometric terminal
Meanwhile the Trust has launched a biometric terminal (BT) as part of its strategy to reduce the human interface in serving its clients.
The BT is a self –service point that allows customers of SSNIT to transact limited business with the Trust without going through a service person at the any of the branches. The product is currently operating in fifteen branches of SSNIT across the country.
But managers of SSNIT are optimistic of extending the use to other parts of the country going forward.
Speaking at the launch of the product, General Manager, Ernest Thompson said,
“Our customers will from today utilize this service especially made for them for their convenience and only visit the branch offices for services that cannot be provided at the terminal…SSNIT has successfully re-registered over 1.5 million members biometrically.”
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