The Social Security and National Insurance Trust (SSNIT) is a statutory public Trust charged under the National Pensions Act, 2008 Act 766 with the administration of Ghana’s Basic National Social Security Scheme. Its mandate is to cater for the First Tier of the Three-Tier Pension Scheme. The Trust is currently the largest non-bank financial institution in Ghana.
The primary responsibility of the Trust is to replace part of lost income of workers in Ghana due to Old Age, Invalidity or Death of a member where dependants receive lump sum payment. It is also responsible for the payment of Emigration benefit to a non-Ghanaian member who is leaving Ghana permanently.
The Pension Scheme as administered by SSNIT has an active membership of over 1.8 million as at April, 2023 with over 235,617 pensioners who regularly receive their monthly pensions from SSNIT.
The Trust was established in 1972 under NRCD 127 to administer the National Social Security Scheme. Prior to 1972, the Scheme was administered jointly by the then Department of Pensions and the State Insurance Corporation. The Trust administered the Social Security Scheme as a Provident Fund Scheme until 1991 when it was converted to a Social Insurance Pension Scheme then governed by the PNDC law 247. The scheme in Ghana was reformed by an Act of Parliament, Act 766 of 2008 and was implemented in January 2010 to replace all pension schemes in Ghana including Cap 30. In 2014, the National Pensions (Amendment) Act 883 was passed to amend portions of Act 766.
“To be the model for the administration of Social Protection Schemes in Africa and beyond”.
“To provide income security for workers in Ghana through excellent business practices”.
THE CORE FUNCTIONS OF SSNIT
- Register employers and workers
- Collect contributions
- Manage records on members
- Invest the funds of the Scheme
- Process and pay benefits to eligible members and nominated dependants.
THE CORE VALUES OF SSNIT
- Customer focus
THE BOARD OF TRUSTEES
The Board of Trustees are responsible for the policy direction of SSNIT. The Trustees are made up of representation from government, employers and workers. It is constituted as follows:
- A Chairperson
- Two persons nominated by the President, at least one of whom is a woman
- Two representatives of Employers’ Associations,
- Four representatives of Organised Labour
- One representative of the Ministry responsible for Finance not below the rank of a Director
- One representative of the Security Services who is not a member of the Ghana Armed Forces
- One representative of the National Pensioners’ Association and
- The Director General of the Trust
The members of the Board of Trustees shall be appointed by the President in accordance with Article 70 of the 1992 Constitution.
The day-to-day administration of the Trust is headed by the Director General assisted by three (3) Deputy Director Generals (DDGs).
There are seven (7) General Managers in charge of Investment and Development (IDD), General Counsel (GC), Finance, Operations, Administration and Human Resources (ADMIN/HR), Management Information Systems (MIS) and Benefits. Other responsibilities under the Directorate include that of the Chief Actuary, the Chief Internal Auditor, the Company Secretary and the Corporate Affairs Manager.
HOW SSNIT OPERATES
SSNIT has a decentralised operational system made up of the Area, Branch, Day Offices and an Agency. An Operations Coordinator at the Head Office co-ordinates all operational activities and reports to the General Manager, Operations.
There are eight (8) Area Offices, fifty-one (51) Branches, twenty-three (23) Day Offices and an Agency spread throughout the country.
The Branch activities include:
- Registration of employers and employees
- Collection and management of data on employers and employees
- Inspection of establishments and collection of contributions
- Distribution of contributor’s statement of accounts
- Assembling, processing and vetting of claim documents as well as payment of benefits
- Processing Student Loan Repayment
- Public Education on SSNIT Operations
The Area Offices exercise supervision over the Branches and carry out the following activities:
- Co-ordinate operational activities between the Branches and Operations Coordinator at the Head Office
- Institute legal action against defaulting employers
- Collate accounting returns and reports from the Branches under them.
- Organise Public Education on SSNIT Operations
- To provide input into the formulation of policies to improve operations and assists to implement them.
- To assist in the preparation of Divisional action plans.
- To assist in developing and implementing service designs which will satisfy customers.
- Evaluates and analyses reports from the various sections of the Operations Division and makes appropriate recommendations
- Collects, collates and analyses periodic Operations Reports for the Board of Trustees.
- Monitors compliance with the Social Security Act by employers and employees.
THE BASIC NATIONAL PENSION SCHEME (TIER-1)
National Pension Act (2008) Act 766
Act 766 makes provision for a contributory 3-Tier Pension Scheme and the establishment of a National Pensions Regulatory Authority (NPRA) to oversee the administration and management of the Pension Schemes. Under the Act, SSNIT is to manage the basic National Social Security Scheme referred to, as the 1st Tier of a contributory 3-Tier scheme.
The other Tiers of the National Pensions Scheme are:
- Tier 2 – A mandatory fully-funded and privately managed occupational scheme.
- Tier 3 – A voluntary fully-funded and privately managed Provident Fund and Personal Pension Plan.
FEATURES OF Act 766
- Mandatory for all workers in the formal sector and optional for self-employed.
- Tier 1 – A mandatory basic contributory Social Security Scheme managed by SSNIT.
- Tier 2 – A mandatory fully-funded and privately managed occupational scheme.
- Tier 3 – A voluntary fully-funded and privately managed provident fund and personal pension plan.
Contribution Rates under the Social Security Scheme ( Tier 1)
- – Employer – 13.0% from worker basic salary
- – Worker – 5.5% from workers basic salary
- – Total – 18.5%
- Out of the 18.5%, the employer remits 13.5% within 14 days of the ensuing month to SSNIT. 5% is remitted to the Second-Tier Mandatory Occupational Scheme.
- Subsequently, SSNIT also gives 2.5% out of the 13.5% to the National Health Insurance Authority (NHIA) for the member’s Health Insurance.
- SSNIT effectively withholds 11% for the administration of Tier 1.
- Entry Age of joining the scheme– 15 years (minimum) and 45 years (maximum) only for new entrants (age 45+ to enter mandatory 2nd tier).
- Age Exemption – 55 years and above exempted (option to join)
- Minimum and Maximum contributions indicated and reviewed periodically.
- Investment of Funds – investment policy, external investments permitted.
BENEFITS & QUALIFYING CONDITIONS.
Four (4) Benefits
- Superannuation Pension
- Invalidity Pension
- Survivors Lump Sum
- Emigration Benefit
- Qualifying period of 240 months (20 years) reduced to 180 months (15 years)
- Guaranteed Survivors benefits payment period increased from 12 to 15 years.
- Increase in guaranteed pension payment period from 12 to 15 years. That is 72 to 75 years
- Hazardous employment benefit – underground miner to retire at age 55 with full retirement benefit.
- Must be between 50 and 60 years to benefit.
- It is a Defined Benefit
- Return of contributions plus interest is given when one does not qualify for any of the two (2) benefits.
- Established a Regulator which is the National Pensions Regulatory Authority -NPRA.
KEY FEATURES OF PNDC LAW 247
The highlights of the PNDC Law 247 include:
- Provision of three (3) benefits – Old Age Pension, Invalidity Pension and Death and Survivors Lump Sum benefit.
- Pensions are paid monthly to qualified members.
- It was financed through employer and employee contributions of 12.5% and 5% of basic salaries respectively. The resultant 17.5% is paid solely to SSNIT.
- Full pension is earned at age 60 with a minimum contribution of 240 months (20years).
- Reduced Pension is earned between 55 and 59 years with a minimum contribution of 240 months.
- A 25% Lump sum Payment Option was available for both Full and Reduced Pension. This is paid at the present value discounted at the prevailing Treasury bill rate.
- Invalidity Pension is earned after 12 months contribution within the last 36 months and member must be declared permanently invalid by a recognized medical officer and certified by a Medical Board.
- Survivors’ Lump Sum is paid to dependants of a member who dies before retirement or when a member dies while a pensioner before attaining age 72.
- Minimum accrual rate was 50% and the maximum was 80% of three best year’s average salary. A return of contributions accumulated at a prescribed interest rate is given to unqualified contributors.
- Pensions are indexed or reviewed annually.
THE TRUST’S OBLIGATION
Social Security and National insurance Trust manages the 1st tier of the 3 tier Pension Scheme. SSNIT has over the years administered Social insurance in Ghana and workers have been well catered for upon retirement and injury under the scheme. All activities undertaken by SSNIT are within the confines of the Law.
The Social Security and National Insurance Trust (SSNIT) is currently charged with the administration of Ghana’s Basic National Social Security Scheme. Its mandate is to cater for the first Tier of the Three-Tier Pension Scheme. The primary responsibility of SSNIT is to replace part of lost income of workers in Ghana.
Therefore the TRUST is mandated by law to;
- Operate the Basic Social Security Scheme which is the 1st tier.
- Ensure general administration of the Social Security Scheme and Regulations.
- Keep a Fund for contributions and other cash received.
- Provide Social protection for working population for contingencies including old age, invalidity, death and emigration.
- Administer and invest funds of the Scheme under general directions of Board of Trustees and approved by the National Pensions Regulatory Authority (NPRA).
- Collaborate with other complementary social protection schemes to achieve efficiency, cost savings and avoid duplication of functions.
- Operate other Schemes that may be prescribed by Law.
SSNIT also registers establishments and employees to furnish them with unique Establishment Registration (ER) and Social Security numbers respectively.
These numbers are not transferable and shall be used by employers and employees throughout their transactions with SSNIT.
The Trust is to ensure that;
- Contributions are paid regularly by employers on behalf of employees.
- Recalcitrant employers who refuse to pay contributions on behalf of its employees are sanctioned.
- Reserved funds are invested prudently
- Accurate data of its members is kept and managed appropriately
- Benefits are paid accurately and promptly to members.
National Pensions (Amendment) Act, 2014, Act 883
An Act to amend the National Pensions Act 2008 (Act 766) to reduce the age for exemption from the First Tier Scheme, Act 766 and to provide for related matters.
- Reduction in the Age Exemption
Members who were 55 years and above as at January 2010 were exempted from Act 766. Members aged 50-54 years who were affected by Act 766 were made worse off. Hence the implementation of National Pensions (Amendment) Act 2014, Act 883. Members who were aged 50 as at 2010 have now been exempted from Act 766. This means that all those exempted will continue to contribute 17.5%. They will also be paid the full benefit namely, monthly pension and the 25% lump sum by SSNIT. Despite the reduction in the age exemption from 55 to 50 years, it is still optional for any such member to decide to join the Act 766.
- Correction of the formulas for computation of Pensions
The Amendment Act 833 also corrected the formula for the computation of pensions by providing that the minimum 15 years or 180 months period of contribution entitles a member to 37.5% pension right and every additional twelve (12) months contribution entitles the member to 1.125% pension right up to a maximum of 60%.
- Emigration Benefit
Emigration benefit is a lump sum payment of benefits to non-Ghanaian members of the Social Security Scheme under Act 766 whose services are ended and are leaving Ghana permanently. Whether the member has reached the retiring age or not, whatever benefit is due him/her will be paid as lump sum in Ghanaian currency to the member.
- Employers to furnish information by SSNIT within Seven (7) working days
The Amendment provides that, where SSNIT officials request an employer to furnish any information relating to the employer, the employer shall furnish the information within seven (7) working days.