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Spencer Wan Blog of Monday, 6 January 2025
Source: Eric Afatsao
The monthly pension payment is increased by 12% by SSNIT.
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The Social Security and National Insurance Trust (SSNIT) has raised pension payouts by 12% per month in accordance with its yearly indexation procedures.
According to Section 80 of the National Pensions Act, 2008 (Act 766), this increase, which takes effect in January 2025, was decided upon after consulting with the National Pensions Regulatory Authority (NPRA).
This will result in a 12% increase in the monthly pensions of all eligible retirees who are still on the SSNIT pension payroll as of the end of December 2024.
GHS 72.58, the remaining 4% that needs to be redistributed, plus a fixed rate of 8% will make up this sum.
The effect of the increase would be GHC396.58 for the elderly with the lowest income. It is 32.19% higher than the minimum pension payment for 2024.
PNDCL 247 and Act 766 stipulate that the highest-earning pensioner will henceforth receive GH¢201,792.37 and GHS 28,703.01 per month, respectively.
In order for recipients to be better equipped to handle financial strains, SSNIT makes this upward adjustment to preserve the real worth of pensions.
Why Indexation?
The primary objective of the indexation is to maintain the purchasing power of pensioners.
SSNIT as prescribed by law works with NPRA to arrive at the right indexation rate for pensions every year. Indexation of pensions is thus an annual requirement by law.
“The Trust shall annually review the pension payment which shall be indexed to wage inflation rates of active contributors or another rate determined by the Trust in consultation with the Board of the Authority”
As part of its mandate, SSNIT ensures that retired members under the Scheme receive their pensions monthly and their pensions are indexed annually.
The rate of indexation for pensions therefore depends on:
Average salary of active contributors from the previous year.
Annual average Consumer Price Index (CPI) from the previous year.
Affordability and the impact of indexation on the cost of pensions to the Scheme.
The effect of indexation on the long-term sustainability of the Scheme.
