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SSNIT pays GHS59 million in past credit to pensioners

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The Social Security and National Insurance Trust (SSNIT) says it has paid the difference in past credit due its pensioners.

These payments are as a result of implementing the agreement reached in a memorandum of understanding between the government and sections of Organised Labour on the interest rate applied to the accrued past credit which is one-time benefit for pensioners who are retiring under the National Pensions Act 2008, ACT 766.

According to SSNIT, the accrued past credit grows at the full 91-day treasury bill rate compounded quarterly until the date of payment to the beneficiary.

Consequently, a difference of GHS59, 612, 321.23 was paid on Thursday, 11 June 2020 to 19,918 pensioners SSNIT said in a statement.

Background

The implementation of the three-tier pensions scheme (Act 766) mandated the Trust (first-tier operator) to pay monthly pensions and the second-tier fund managers to pay lump sum which hitherto was being paid by the trust under the Social Security Law (PNDCL 247).

However, workers affected by the Act 766 who sat at the 31 December 2008 (i.e the eve of the implementation of Act 766) had contributed to the SSNIT Scheme were entitled to a Past Credit.

The past credit constitutes 4% of contributors’ salaries, accumulated with interest from the dates on which the contributions were received by the Trust up to 31 December 2009.

This past credit plus additional accrued interest which has been adjusted from 75% to 100% of the prevailing Treasury Bill rate from 1 January 2010 till the date of retirement is what is paid to the member by SSNIT as part of their lump sum.

This application of 100% of the 91-day Treasury Bill rate compounded quarterly in determining the additional accrued interest is what has yielded the over GHS59 million additional payment to members who are receiving their pension under Act 766.

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