top of page
  • Think News Online

“We Want A Pension System Where Employers Will Comply And Avoid Payment Of Needless Penalties"-SSNIT


The Director-General of the Social Security and National Insurance Trust (SSNIT), Director-General, Dr. John Ofori-Tenkorang has hinted that its outfit will ensure that it has a pension system where a majority of employers will voluntarily comply and avoid payment of needless penalties.


According to Dr. Ofori-Tenkorang, payment of penalties are a huge cost to businesses and impairs organizational reputation.


Speaking at the Annual Business Forum For Forty Under 40, he said “So this morning, if there is one message I’d like to strongly emphasize, then it is for you, as young employers and people of repute, to pay the social security contributions on time or ensure your employers pay on time, that is, by the 14th of the succeeding month”



He charged Organisations to avoid the temptation of paying only for their workers because it is compulsory and leaving one’s name off the contribution report.


The Director-General urged the distinguished nominees of the Forty under 40 Awards, to see the social security premiums they pay as a contribution to the future financial wellbeing of their workers and not necessarily a response to demands by the law.


He noted that it helps in enhancing employee commitment and loyalty.



“You have a responsibility first towards yourselves as workers and as employers” he mentioned.


“As I’ve said before, the Social Security and National Insurance Trust (SSNIT) Scheme and the monies in there are for Members. This means Members have the right to information and to question how the scheme is run. We can only answer these questions without fear if we are transparent. Transparency will mean full disclosure on our part, bringing Members up to speed on our operations and their contributions and how we are discharging our obligations as stipulated by law. And all of this must be served on a platter of world-class service delivery”


Explaining further, Dr. Ofori-Tenkorang noted that the Pensions Act establishes a three-tier pension scheme where the first and second tiers are compulsory and are funded by both employers and workers.



“As an operator of the First Tier Scheme, our primary objective is to provide a retirement benefit to workers during old age or in the event of permanent invalidity once they meet the qualifying criteria. We pay these pensions, be it Old Age or Invalidity, throughout the lifetime of the pensioner. For non-Ghanaian workers in the country, they are paid a one-time lump sum which is a refund of their contributions plus interest when they are permanently leaving the country. We can only be able to meet our obligations to workers or pensioners if you fulfill yours as employers and Members of the Scheme.”


Stressing on the obligations of the employer, he revealed that as employers, they must register their businesses and every worker they engage with the social security scheme within 30 days of commencing operations.


He noted that beyond registering, the employer has to pay contributions for every employee, whether permanent or temporary.



“The total compulsory contributions that is made to SSNIT and the second tier fund managers is 18.5% of the worker’s basic salary. And so, at the end of every month, you are required as employers, to deduct 5.5% of your workers’ salaries and top it up with 13% (based on those same salaries) making 18.5%. Part of this, that is, 13.5% is remitted to SSNIT not later than the 14th day of the ensuing month. So, for September contributions, you have up to 14th October to pay. Late payment attracts interest or penalty. The 5% is paid to a second-tier fund manager of your choice” he said.


Touching on handling employer non-compliance, he said “Distinguished nominees, it is our desire that no employer defaults in the discharge of their social security obligations. When you violate any of these provisions, the Trust is compelled to take legal action against you because as I said, the law places an obligation on us to pay benefits to workers or their dependents. And as of the end of August 2021, we had spent over 2.13 billion (2,127,593,594.67) paying benefits”


He stated that exercising the option of prosecution is however the last resort because SSNIT understands that businesses go through hard times.



“We are also not eager to take legal action because we believe that the enormous benefits the Scheme offer Members should motivate you and all employers to contribute voluntarily. What I mean is that the thought of contributing only 13.5% of your salaries, so you, as well as your workers or colleagues, can receive up to 60% of the average of your three best years’ salaries when you retire should encourage you to be regular with your contribution payments. And by the way, your pension will be paid with annual increment throughout your lifetime as a pensioner”


“Friends, if age 60 seems like too long a time to wait to claim a benefit, consider a situation where you or your worker has been declared invalid and incapable of engaging any in income-generating activity. Old age may be far, but permanent invalidity may be minutes away. With just 12 months of contributions within the past 36 months, you will be guaranteed an Invalidity Pension for life or until you recover. And by the way, there are several people of your age who are receiving monthly Invalidity Pension from SSNIT. Indeed, there are 1,497 Invalid Pensioners on the pension payroll and just last month (August 2021), we paid over 1.65 million cedis (GHS1,655, 234.00)”

In spite of these benefits, as at the end of August 2021, SSNIT had to initiate court cases against 13, 278 employers for various offenses including failure to register their establishments and workers and failure to submit contribution reports.



He mentioned that most of the cases were related to failure to pay contributions and associated penalties.


“These employers, aside from being compelled to pay the contributions that may be owed, risk being fined up to a maximum 30,000 Ghana Cedis or a prison term not exceeding five years or to both. This should tell you the premium that is placed on securing the future of workers in Ghana”


He described the court actions as a drain on both employers and the Trust.



“I want to assure you that we shall continue to explore various options to create platforms that facilitate easy payment of workers’ contributions. We will continue to engage you as valuable partners of the Scheme with the aim of serving you better”


He reminded the gathering that SSNIT values their comments thus its doors remain open.


He also noted that the feedback customers give is vital in shaping its operations and service delivery.



I urge you, distinguished nominees of the Forty under 40 Awards, to see the social security premiums you pay as a contribution to the future financial wellbeing of your workers and not necessarily a response to demands by the law. This helps in enhancing employee commitment and loyalty”


“I want to assure you that we shall continue to explore various options to create platforms that facilitate easy payment of workers’ contributions. We will continue to engage you as valuable partners of the Scheme with the aim of serving you better”


Story by: Joshua Kwabena Smith

0 comments

Comments


bottom of page