The Social Security and National Insurance Trust (SSNIT) says it will collapse if it decides to pay past credits in the form being demanded by the Forum for Public Sector Registered Pension Schemes.
“SSNIT will collapse in just two if we are to go by what the FORUM is demanding in terms of the calculations of past credits due to contributors…..The Trust remains resolute in paying lumps sums due to contributors but we will not go beyond what the law states’, Dr John Ofori-Tenkorang, Director-General explained at a press conference in Accra.
The forum, at a press conference on September 12, 2019, accused SSNIT of foot-dragging with the implementation of the modalities for the past credit, adding that the trust was reluctant to “come out with modalities for the calculation on past credit earned as of December 2009, based on a 100 per cent treasury bill rate, compounded quarterly and the issuance of statements to each contributor”.
Ready to pay
However, Dr Ofori-Tenkorang reiterated its readiness to pay all accrued past credits to its contributors in accordance with the provisions of the National Pensions Act, 2008, Act 766, with amendment (Act 883).
He insisted the Trust was operating in the ambit of the law.
The trust, he said is following directives by a Ministerial Committee formed in September 2017 to resolve outstanding issues relating to transfer of funds from the Tier two Pension Funds
He said the recommendations, by the committee, has been agreed on by both parties (SSNIT and the forum for Public Sector Registered Pension Schemes and supervised by the National Pension Regulatory Authority (NPRA).
“The committees’ report was accepted and signed on behalf of the FORUM by Isaac Bampoe Addo and Dr Justice Yankson”
“The committee report indicated that the formula for computation (captured in the findings under past credits) as agreed between NPRA and SSNIT should be accepted by all parties, “he said.
According to him, the representatives of the FORUM by appending their signatures to the recommendations meant they had agreed to it.
Dr Ofori-Tenkorang insisted the trust will not go outside the agreed formula of paying past credits to workers.
The law
He said the demand from the Forum for Public Sector Registered Pension Schemes was not in the National Pensions Act, 2008, Act 766, with amendment (Act 883).
Section 94 (1) (d) of the act, titled: “Transitional Provisions”, states that “accrued or past service or past credits earned by every contributor to whom the new scheme applies in respect of the 25 per cent lump sum benefit shall have the lump sum determined by a formula agreed between the Pension Reform Implementation Committee and the trust, based on actuarial assessment”.
“SSNIT will collapse in just two if we are to go by what the FORUM is demanding in terms of the calculations of past credits due to contributors…..The Trust remains resolute in paying lumps sums due contributors but we will not go beyond what the law states’ he noted.
The past credit is the contribution of workers to SSNIT before the coming into force of Act 766, which brought about the three-tier pension scheme.
The forum
But Addo, who is also the Hedge Master of the Trust Occupational Pension Scheme, said: “The forum sees the stance of SSNIT as a tactical move to sabotage the smooth implementation of the three-tier pension scheme, which is scheduled to be fully operational with effect from January 1, 2020.”
Statement on past credit
An earlier statement issued by SSNIT maintained that, “The computation of past credits is based on the agreed formula and such past credits will be paid to members who retire from January 1, 2020. Contrary to the assertion by the forum, SSNIT is not using contributors’ money to ‘obstruct’ the implementation of Tier Two.
“Currently, the Tier Two scheme is being implemented and SSNIT is not against the implementation of the three-tier pension scheme,” the statement added.
It said the management of the trust remained focused on ensuring that it fulfilled fully its obligations under the National Pensions Act, 2008, Act 766.