More than half (53 per cent) of the 233,670 pensioners on the Social Security and National Insurance Trust (SSNIT) payroll currently receive less than GH¢1000 per month, Director of Planning, Research, Monitoring and Evaluation at the National Pensions Regulatory Authority (NPRA), Mr. Ernest Amartey-Vondee, has disclosed.
Out of this number, he said 1,669 people were on low pensions of less than GH¢300 per month, with 26,571 of them receiving pensions between GH¢301 and GH¢499.
The next bracket is people who receive GH¢501 but less than GHȼ1000 and the number is 124,655.
This means that cumulatively, 152,895 people earn pensions less than GH¢1000 which represents 53 per cent of the total number.
Mr Amartey-Vondee said this was part of the reasons for the diversification of the pension base which led to the introduction of the three-tier pension scheme in 2010.
He was speaking at a stakeholder engagement organised by Old Mutual Ghana.
“The main reason for the reforms was to diversify the pension’s income base,” he stated.
After January 2010, the pension provision base was diversified and the three-tier pension system was introduced.
He, therefore, urged workers to take advantage of the three-tier pension scheme to enhance their pension income.
“The highest pensioner is currently receiving over GH¢129,000 per month. You can reach that level if you contribute appropriately to the right kind of schemes,” he stated.
National Pensions Act
Mr. Amartey-Vondee also noted that one of the causes of the low pension incomes had to do with the National Pensions Act and how it defined salary as the basis of contributing to the SSNIT scheme.
“This restricts the contributions salary to the basic salary but we found that most people receive allowances that are even more than their salaries but the law does not encourage them to contribute based on their basic salary plus their allowances.
“So it makes the basic salary so low and consequently low benefits coming from the SSNIT scheme,” he stated.
He said while SSNIT had an active contributor population of about 1.6 million people, 25 per cent of this number contribute on salaries of GH¢400 or less.
“About 50 per cent contribute on basic salaries of less than GH¢1000, while 71 per cent contribute on salaries of less than GH¢1800. It is only four per cent who contribute on salaries of GH¢5000 and above and this is equally reflected in the low pensions that people receive,” he explained.