The Africa Centre for Retirement Research (ACRR) has bemoaned a policy by the Social Security and National Insurance Scheme (SSNIT) to reject contributions from employers on behalf of workers aged 60 and above.
According to the Executive Director of the Centre of Abdallah Mashud, the policy is a social security disaster that has no actuarial linkage and is not in line with best practices.
In a statement issued and sighted by GhanaWeb Business, the ACRR said the move by SSNIT represents a gross violation of the rights of workers.
It further outlined that the policy decision could have resulted from a lack of thorough analysis of the data and wrongful interpretation of section 70 (1) of Act 766.
“If the Trust did any actuarial assessment of the effect of their action, stakeholders and the public deserve to know what the data says about the financial impact if all the over 11,000 affected workers were to apply for their benefits at a time and immediately,” the statement read in part.
“The policy has a significant adverse effect on both the affected workers and the scheme. The scheme is currently facing sustainability issues (at least the valuation reports have indicated so). The Trust has already rejected substantial contribution income (into millions of Ghana Cedis) from employers and voluntary contributors. This action by the Trust could be interpreted as a financial loss to the Trust,” it added.
The Centre further said it is not enough for the Director-General of the Trust to verbally inform stakeholders about the financial health of the scheme and its ability to pay benefits into the future, adding that assurance must be based on the actuarial valuation reports.
The statement also indicated that the Scheme’s assessment report for the period 2018 to 2020 is yet to be finalised leaving stakeholders about six years in the dark about developments.
The ACRR advised that, to minimize the political risk facing the scheme, the Director-General of SSNIT must be made to present to Parliament and thus disclose the actuarial status (health) of the scheme once every two years, as best practices require.
“The ACRR is strongly advocating that the policy must be reversed immediately. The policy will prevent many workers from qualifying for pension, hence deepening old-age poverty and economic inequalities. Recall that bridging economic inequalities is top on the agenda of the United Nations Sustainable Development Goals (SDGs). The policy if not reversed will adversely affect the success of the Trust’s effort to extend pension coverage to self-employed workers.”
“SSNIT as a purely Social Insurance Scheme must consider the policy as one that will considerably affect the retirement wellbeing of thousands of workers, and therefore will require thorough examination and even an amendment to Act 766 for implementation. This development has also lent credence to the proposal that SSNIT must enhance stakeholder consultations on the administration of the scheme,” ACRR concluded.
Read the full statement below:
Source: www.ghanaweb.com