The National Pensions Act, 2008 (Act 766 as amended by Act 883) is being amended to include allowances of workers in the computation of pension.
Currently, it is only the basic salaries of workers which employers use to compute the pension contribution of their workers to SSNIT.
The Director-General of Social Security and National Insurance Trust (SSNIT), Dr John Ofori-Tenkorang, who disclosed this at a Breakfast Meeting with Employers in Accra yesterday, said the move was to help retirees to get enhanced pension when they retired.
“We are looking at many possible amendments in the Pensions Act. Some of them is just to ensure the drafting is very clear and to clarify the language that is being used, some of them are to make sure that any loopholes that people can take advantage of to the detriment of the scheme is closed,” he said.
The 2022 Employers Breakfast Meeting, the third in the series and attended by employers from Greater Accra and Eastern Region was on the theme “The Sustainability of the SSNIT Scheme: The Role of Employers.”
DrOfori-Tenkorang explained that, the consolidation of allowances would help enhance the pension workers take after retirement.
He explained, even though some workers took home big salaries, such individuals took home less pensions because pensions were calculated on basic salaries, excluding allowances.
For example, he cited an example of a Medical Doctor who complained of taking monthly pension of about GH¢ 1, 200.00, yet his take home salary was about GH¢ 6000.
Dr Ofori-Tenkorang said when he delved into the issue he realised that although the Medical Doctor’s take home salary was about GH¢ 6000 per month, his basic salary was GH¢ 2000, an amount which his employers used to calculate his monthly pension contribution.
He said the calculation of pension contribution was computed on one’s basic and not gross salary.
The Director-General further said the amendment was also considering the issue of penalty to ensure value for money for SSNIT.
Dr Ofori-Tenkorang explained, that the amendment on penalty would make it obligatory for the employer to pay a certain interest rate when they delay in remitting to SSNIT pension deductions they made on behalf of their employers and also increase the percentage of money paid on penalty to make it penal to dissuade employers from sitting on SSNIT money.
The Director-General said management of SSNIT was finalising work on the amendment and forward it to the Executive Committee for perusal and onward submission to the Board for deliberation before it was submitted to the National Pensions Regulatory Authority for the input of stakeholders and submission to Parliament.
Dr Ofori-Tenkorang encouraged informal sector workers to take advantage of SSNIT and register with the scheme to enjoy retirement income security, stressing that “SSNIT is the best insurance package in the insurance market.”
He said SSNIT was the only scheme which paid the subscribers till they died.
The Head of Social Protection, Occupation Safety and Health of Trades Union Congress, MsTeresa Nadia Abugah, urged unions to negotiate with employers consolidate allowances of workers into salaries.
That, she said, would help workers take home enhanced pensions when they retired.
She said some workers took allowances which were bigger than their salaries, but such allowances were not factored in the payment of SSNIT contributions.
BY KINGSLEY ASARE