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Private sector contributions to SSNIT are up by 3.9% – BoG report

The Bank of Ghana’s report says the increase in workers’ contributions to SSNIT is the product of improved compliance by private sector employers

Private sector workers’ contributions to the Social Security and National Insurance Trust (SSNIT) pension scheme amounted to GHC610.81 million in the first quarter of 2020, compared with GHC587.83 million recorded for the fourth quarter of 2019.

This represents a growth rate of 3.9% on collections during the last quarter of 2019, says the latest Bank of Ghana (BoG) quarterly bulletin. Year-on-year growth in contributions was 24.8% – GHC489.43 million was collected in the first quarter of 2019.

The report reckons that the increase in private workers’ contributions to the SSNIT pension scheme can be attributed to registration of new employees, as well as improved compliance by private sector employers.

Over the years, SSNIT has made considerable effort to increase rates of contribution to the national insurance scheme, especially within the private sector, which has been largely non-compliant.

Change the narrative

The bulletin says the improvement in private workers’ contribution to SSNIT is a product of improved compliance by private sector employers. The assessment implies that, gradually, the narrative is changing.

In a move to increase pension coverage, SSNIT recently launched its Virtual Infozone to educate contributors and other members of the public about the scheme and its benefits, principally with the intention of enabling people yet to join a Trust pension scheme to do so.

Members of the public have expressed satisfaction with the Virtual Infozone – an information-sharing platform that allows SSNIT to use various digital meeting channels such as Facebook Live, Zoom and WhatsApp. The response suggests it is likely that the contributors’ base might grow significantly this year over the existing membership of 1.6 million-plus as at December 2019.

Reaching into cocoa

The 2019 pension report on Ghana’s informal sector says that although significant investments have been made to improve contribution collection processes, the industry will still have to make a substantial effort to reach all informal sector workers who are able to save.

It has already made some recommendations to assist Ghana to increase its pensions coverage in the informal sector. The viability of pensions administration, the report adds, is driven largely by economies of scale.

“If a new or existing informal sector scheme is given sole responsibility for covering the cocoa farmers, economies of scale could be achieved. This will allow outreach to other groups of informal sector workers in a financially viable manner,” the World Bank says in a report on pensions coverage in Africa’s informal sector.

However, the World Bank report shows that coverage of the elderly through contributory pension schemes is not expected to improve. But managers of the first-tier scheme are undeterred, and are looking to improve coverage of formal private sector workers to bring about a growth in overall contributor numbers.

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Source
Goldstreetbusiness.com
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