James Klutse Avedzi, the Chairman of the Public Accounts Committee of Parliament (PAC), has attributed the depletion of the Social Security and National Insurance Trust’s (SSNIT) reserves to unprofitable investments.
The International Labour Organization’s (ILO) recent report predicts that SSNIT’s reserves will be completely depleted by 2036.
Mr Avedzi finds this disclosure unsurprising and advocates for better supervision of SSNIT’s operations.
In an interview with TV3, he said, “SSNIT continues to enter into investments that aren’t profitable. I wasn’t surprised at the ILO’s report on the reserves of SSNIT depleting. Something must be done about the work of SSNIT.”
According to the ILO’s report, starting in 2029, the total income, including contributions, investment income, and other income, will no longer cover annual expenditures, leading to a decrease in reserves.
The report also indicates that the reserve will be exhausted by 2036.
As per the report, SSNIT will lack the means to pay pensioners and will be compelled to use the reserves, a strategy that will be unsustainable by the specified year.
“The reserve ratio, which is the ratio of the end-of-year reserve over the annual expenditures for the year, moves from 3.4 to 0 between 2021 and 2036.
“This ratio can be interpreted as the number of years during which annual expenditures could be paid by the reserve if there were no contributions, no investment income and no other income,” ILO noted in its report.
However, SSNIT has dismissed the report saying it has enough reserve capable of paying beneficiaries of the scheme as well as fulfilling its financial obligation beyond 2036 contrary to some media reports.
Speaking at a news conference in Accra to clarify various portions of the report, the Chief Actuarial Officer of SSNIT, Joseph Poku, said its outfit provided all the data to ILO as part of requirements to subject its operations to the international body for valuation at least every three years.
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