The reason retirees receive low pensions
Data made available by the Social Security and National Trust (SSNIT), has demonstrated that most Ghanaian workers are paid low salaries and wages.
Crux of the low pensions
This is the crux of the low pensions paid to majority of the over 230,000 pensioners currently in the country.
1.9m active contributors
The records show that the total number of contributors as at April 2023 amounts to over 1.9 million (1,930,780).
The data reveals that only 27.7% of active contributors earn between GH₵2,000 and GH₵5,000 as monthly salaries.
In view of this, the contributors in the range pay premium ranging from GH₵220 to 550 each month.
Should these contributions remain unchanged, these workers are guaranteed GH₵3000 or less as starting monthly pensions.
Annual increase through indexation
This is subject to annual increase through indexation
502,855 workers paid GH₵500 salary a month
According to the data, a staggering 502,855 workers representing 25.99% who actively contribute to SSNIT earn GH₵500 or less monthly.
GH₵55 premiums a month, GH₵300 pensions
These contributors pay GH₵55 or less on the average as their SSNIT contribution each month and those who retire on this salary receive starting pension of GH₵300 a month.
SSNIT subsidies lowest salary earners
Actually, those who earn less than GH₵500 should receive pension less than GH₵300 but SSNIT is magnanimous to pay all of them GH₵300 as minimum pension for contributors.
It means SSNIT is actually subsiding pension payments for those who earn less than GH₵500 a month.
365,699 workers paid GH₵500 to GH₵1,000 monthly salary
Per the data, another set of 365,699 workers earn above GH₵500 to GH₵1,000 representing 18.9% of total contributors.
GH₵110 premium, GH₵600 pension
The amount this category pays to SSNIT every month is averaged GH₵110 or less and those who retire on this salary are entitled to a starting pension of GH₵600.
868,554 paid up to GH₵1,000 a month
This means that from the lowest earner on the SSNIT database to earners of GH₵1,000 a month, the total number is 868,554 which represents 44.89% of total contributors.
189,061 workers paid between GH₵1,000 and GH₵1,500 monthly
A further breakdown of the data reveals that some 189,061 workers earn between GH₵1,000 and GH₵1,500 and this represents 9.7% of total contributors.
GH₵165 premium, GH₵900 pension
Here contributors remit GH₵165 to SSNIT every month and those who retire on this receive pension of GH₵900.
1,057,615 workers paid GH₵1,500 or less a month
It shows that the total number of contributors from the lowest salary earner up to GH₵1,500 are over one million (1,057,615), constituting some 54.66%.
240,039 workers paid GH₵1,500 to GH₵2,000 salary a month
From the data, some 240,039 workers paying SSNIT make between GH₵1,500 and GH₵2,000 a month, which represents 12.4% of total contributors.
GH₵220 premium, GH₵1,200 pension
For this category of workers, the SSNIT contribution is GH₵220 and accrued monthly pension on this is GH₵1,200.
Over 1.2m workers paid GH₵2,000 or less salary a month
This means that over 1.2 million (1, 297,654) workers contributing to SSNIT earn GH₵2,000 or less and this represents 67.07% of total contributors.
536,596 workers paid GH₵2,000 to GH₵5,000 monthly salary
Active contributors who receive salaries from GH₵2,000 to GH₵5,000 is 536,596 and account for 27.7% of total contributors.
GH₵550 premium, GH₵3,000 pension
The SSNIT contribution is GH₵550 and the cumulative projected pension right amounts to GH₵3,000.
1.8m paid GH₵5,000 or less monthly salary
It means that 1.8 million contributors (1,834,250) representing 94.8% of total SSNIT contributors earn GH₵5,000 or less.
96,530 workers paid GH₵5,000 to GH₵42,000 monthly salary
According to the data, contributors earning salaries more than GH₵5,000 to GH₵42,000 number 96,530 and this constitutes 4.9% of total contributors.
GH₵4,620 premium, GH₵25,200 pension
In this category, the cumulative SSNIT contribution is GH₵4,620 and pensions right is GH₵25,200.
This brings the total number of contributors who earn GH₵42,000 or less a month to over 1.9 million (1,930,780) representing 99.79%.
Highest salary SSNIT can insure is GH₵42,000
Currently, the highest salary that SSNIT can take onboard is GH₵42,000.
4,029 workers paid over GH₵42,000 monthly salary
However, there are some 4,029 of active SSNIT contributors which constitute 0.21% of workers in Ghana who earn more than GH₵42,000.
It means SSNIT insures GH₵42,000 of their salaries.
11% contribution guarantees 60% of average 3 years’ best annual salaries
Per the law, 11% contribution guarantees contributors up to a maximum of 60% of the average of three years’ best annual salaries, depending on the number of years the worker has contributed.
Director-General (D-G) of Dr John Ofori-Tenkorang, said accusing SSNIT for the low pensions some retires receive without considering the salaries on which they paid premiums is baseless.
He said it was time for labour to critically consider pensions when negotiating for wages and other benefits with the government and other employers.
He emphasised the need to consolidate allowances with salaries to enable the percentage set aside for one’s pension to reflect what one earned every month as basic salary.
According to Dr Ofori-Tenkorang, if the contributions of workers are not significantly improved, the reality of their pension payments might not be that different from those already on retirement.