Pension Matters with Kimpton Trust: Your actions today can change your family history

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A good person leaves an inheritance for their children’s children, but a sinner’s wealth is stored up for the righteous – Proverbs 13:22

Certainly, as parents the wrong attitude would be to spend all we have in order to enjoy it before we die.  A component of stewardship, and getting serious about finances, is managing money wisely so that we can invest in the future of our children.

The mismanagement of money could impact some of the financial struggles your child may or may not face in the future.

One of the ways of securing the future of your family, even when you are no more, is instituting a very good pension system for oneself, the essence of the three-tier pension system. For the purpose of this article, the discussion will be limited to the Basic National Social Security system. The auxiliary pensions systems will be discussed in subsequent articles.

DEATH AND SURVIVORS LUMP SUM

A member, while contributing to the SSNIT scheme, is required to nominate beneficiaries. It is important that one reviews the beneficiary list from time to time to ensure that the records at all material times reflect how the member would want his estate to be distributed in the event of his/ her demise. This may reduce apprehension and confusion among the family in the distribution of benefits.

Death and Survivors Lump sum is benefit paid to nominated or eligible beneficiaries of a deceased contributor or pensioner. It can also be paid to persons upon an order by a court of competent jurisdiction.  This benefit is paid when a member dies in active service or during retirement and has not attained the age of 72 years for those under PNDCL 247 and 75 years for those under the National Pensions Law, Act 766 respectively. Deceased member’s beneficiaries will be identified and all benefit due paid to the beneficiaries identified.

SURVIVOR’S LUMP SUM

This benefit is paid to dependants of members under the following conditions:

  • When the member dies before retirement; or
  • When a pensioner dies before attaining age 75.

CALCULATION OF SURVIVORS’

LUMP SUM

The benefit is computed as follows:

  • Where a member dies having made at least twelve months’ contributions within the last 36 months prior to the death of the member, a lump sum payment of the earned pension of the deceased member for a period of 15 years will be paid. The amount will be the present value discounted and paid to the member’s nominated dependants.
  • Where a member dies before making at least twelve months contribution within the last 36 months, a lump sum equal to the total contributions and interest shall be paid to the nominated dependents.
  • Where a pensioner dies before attaining age 75, a lump sum payment based on the present value of the unexpired pension of the member will be made to the beneficiaries.

HOW TO APPLY

  1. Report the death of the member to the nearest SSNIT Branch with any of the following:

Primary Evidence:

  • Letter from the employer where available.
  • Affidavit from Chief of the Village or Town.
  • Police Report.

The following Secondary Evidence of death could be accepted in addition to the above mentioned:

  • Posters
  • Burial Permit, etc.
  1. On receiving information of the death of a member, SSNIT will identify the nominated dependant(s) and request them to apply for the benefit.
  2. A dependant(s) may call at a SSNIT

Branch to collect, complete and submit an Application Form with the following:

  • The Membership Certificate of the deceased if available.
  • Birth Certificate of minors if applicable
  • A Bank Account Number that bears the dependant’s name – evidence of bank account details.
  • A photo identity card.

SSNIT will process the application and a lump sum payment will be made into the account.

EMIGRATION BENEFIT

Emigration benefit is a lump sum payment of benefit to non-Ghanaian members of the Social Security Scheme under Act 766 whose services are ended and are leaving Ghana permanently. Whether the member has reached the retiring age or not, whatever benefit is due him/her will be paid as lump sum in Ghanaian currency to the member.

To qualify for emigration benefits:

  • You must be a non-Ghanaian contributor.
  • You should be leaving Ghana Permanently.

HOW TO APPLY

Contact the nearest SSNIT office with the following:

  1. a) A letter from your employers. (Evidence that you are emigrating)
  2. b) A copy of your passport. (Personal Details Section)
  3. c) Copy of your work and residence permit.
  4. d) A confirmation of your nationality.
  5. e) Evidence of Bank Account (in Ghana) that bears your name.
  6. The Branch will provide you with Emigration Lump Sum Benefit application form to be completed and endorsed by the Mission.
  7. The completed forms should be submitted to the Branch office.
  8. SSNIT will advise you to collect your lump sum payment at the bank.
  9. In case a beneficiary wants someone to receive the benefit on His/her behalf, the following must be done:
  10. Evidence that the beneficiary will be out of the country at the time of Payment.
  11. Authority to Receive Benefit on Behalf of a Beneficiary Form must be properly completed and signed by the beneficiary.

Calculation of Emigration

Benefit

  1. If the member does not qualify for Pension a return of contribution together with interest will be paid to him or her.
  2. If the member qualifies for Pension; the present value of the member’s pension shall be paid as lump sum benefit.

(Credit: SSNIT, Pensions Act)

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