The Social Security and National Insurance Trust (SSNIT) has increased pensions in payment as at December 2007 by an average of 17% compared with an average increase of 15% for 2006. This increase has been redistributed in line with the solidarity principle of social insurance. Individual increases range from 11% for those on higher pensions to 33% for those at the lower end.
The increases take effect from January 2008 and apply only to pensioners on the pension payroll as at 31st December, 2007.
The review will raise the current pensions expenditure by GH¢11.1 million (¢111 billion). The total cost of pensions for 2008 in respect of current pensions is estimated at GH¢76.6 million (¢766 billion).
The detailed redistribution is as follows:
A uniform percentage increase of 11% and a flat amount of GH¢4.05 per pensioner.
The new minimum pension for 2008 will be GH¢22.00, compared to GH¢18.20 for 2007.
The overall increase in pensions is based on the average increase in the salaries of active contributors to the scheme in 2007.
This review in pensions is in line with the Social Security Law 1991, PNDC Law 247 which provides for a review of pensions annually. Accordingly since 1992 SSNIT has reviewed pensions and the reviews have been based on the average increase in salaries of contributors during the previous year.
The critical factor which affects the level of pensions is the salary on which a member contributes to the social security scheme. The other factors are the contribution period indicating how long a member contributes and the age at which a member retires for the old age pension.
