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Social Security and National Insurance Trust (SSNIT) has announced an 11% increment in pension benefits.
According to the Director-General of SSNIT, John Ofori-Tenkorang, the increment is geared towards preserving the purchasing power of pensioners.
He said it will take effect this January.
The 2020 indexation was pegged at 11 percent with 6.6 percent as a fixed rate and 4.4 percent being redistributed as a flat amount of GH¢37.38 to benefit those earning lower pensions.
“With this redistribution, lowest-earning pensioners will get an indexation rate of 19.06%, whilst 70% of pensioners will receive 11% or more as an effective increase in their pensions and 98% will receive an effective increase equal to or above the targeted inflation rate of 2020” Mr. Ofori-Tenkorang explained.
He said the adjustment is to cushion members on low pensions in line with the solidarity principle of social security.
“Low pensions arise as a result of low basic salaries on which contributions were paid, the minimum pension for all new pensioners for 2020 will be GHC300” he said
Mr. Ofori-Tenkorang said the 11 percent increment will cost the Trust GHC243 million for the year 2020 and projects to pay GHC240,000 million as pensions by the end of the year.
Providing some more details, he observed that, the legal provisions for the indexation is found in National Pensions Act, 2008 section 80 and states that “the Trust shall annually review the pension payment which shall be indexed to wage inflation rates of active contributions or another rate determined by the Trust in consultation with the Board of the Authority”.
“SSNIT will continue to work hard to guarantee positive annual indexation for pensioners bearing in mind the long-term sustainability of the scheme.”
“SSNIT is committed to improving its service delivery and consolidating the gains made within the last two years to accelerate its aim of becoming the administrator of the pension of choice.”