After posting an abysmal performance in 2016, the Social Security and National Insurance Trust (SSNIT) made a strong comeback in 2017 to register positive gains in key aspects of its operations.
Data made available to the Daily Graphic by the Director-General of the trust, Dr John Ofori-Tenkorang, in Accra yesterday showed that total investment assets, contributions received, benefits paid and the number of pensioners registered recorded strong growth in 2017, compared to 2016 when they all declined.
The data showed that total investment assets went up by 12.2 per cent to GH¢9.2 billion in 2017, from GH¢8.2 billion in 2016.
The growth was funded by corresponding increments in total contributions and returns on investments.
According to the data, total contributions to the trust stood at GH¢1.5 billion in 2016 but rose to GH¢1.9 billion last year, representing a 26.7 per cent growth in a year.
It indicated that return on investment was 0.3 per cent in 2016 but rose to 3.5 per cent in 2017 due to strong growth in the equities portfolio of the trust’s investment.
It further showed that GH¢2.2 billion was paid to 189,549 pensioners in 2017, compared to 2016 when some GH¢1.7 billion was paid to 174,164 pensioners.
Reasons for increment
Commenting on the positive trend, Dr Ofori-Tenkorang said the achievement was due to cost-cutting measures and a new investment drive that ensured that SSNIT’s funds went to the highest bidder.
“A major part of it is from the investment gain due to the revaluating of the Ghana Stock Exchange. However, we also did a lot of cost-cutting and, although interest rates were low, we revised our treasury policy and said that we had to lend money to commercial banks and other financial institutions at treasury bill (T-bill) rates, plus at least three per cent,” he said.
He explained that while substantial resources of SSNIT were invested at T-bill rates, plus one per cent, the new investment policy ensured that some funds were invested at T-bill rates, plus five per cent.
“When we came, we said all our short-term investment placements have to be at least T-bill rates, plus three per cent. That means immediately you are picking up some 2.5 per cent extra; that is, if you did it earlier, but we even did some as high as 5.3 per cent,” he added.
To ensure prudent use of resources, he said, SSNIT pruned its expenditure budgets by excluding items that were not relevant to the welfare of pensioners and contributors.
A typical example, he said, was the decision to halt giving hampers as gifts during festive seasons, which saved close to GH¢1 million of SSNIT funds.
What to expect
Going forward, the director-general said the board and the management would continue to give priority to contributors and pensioners in the activities of SSNIT.
“They are our first priority. If SSNIT has any largesse to spread around, it should go first to the pensioner and contributor,” he said, adding that the positive performance registered in 2017 was a sign of good things to come.
On plans for the future, he said the SSNIT management was working to expand coverage to enable more people to benefit.
To achieve that, Dr Ofori-Tenkorang said, the trust had subscribed to the establishment data of the Registrar-General’s Department, making it possible for SSNIT to have access to about 250,000 companies registered in the country.
“Currently, we only collect from about 50,000 companies. Even if 100,000 companies are not operating, we have another 100,000 to reach,” he said.
He also mentioned the informal sector as one area where the trust would target to help expand coverage and rope more people into the pension business.
He also revealed plans to link company data available to SSNIT to the Ghana Post GPS address system, “so that we know exactly where they are located, so that compliance can be enforced”.
“We also want to focus on customer service. We started last year and are getting some good feedback. We also want to focus on public education, so that people understand better what we do,” he added.
Following the coming into being of the National Pensions Act, 2008 (Act 766), SSNIT, which was established in 1972, has been restricted to the management of tier one funds, while the tiers two and three have been handed over to private schemes.