Even as the Social Security and National Insurance Trust (SSNIT) has said payment of Past Credit has been effected, some pensioners are feeling shortchanged and therefore demanding the formula for calculating the amount.
According to them, the Past Credit – which is a one-time benefit being paid pensioners who are retiring under the National Pensions Act, 2008, Act 766 – is not only meagre but also in clear violation of the Pensions Act.
The Past Credit is simply funds that remained with SSNIT after the coming into force of Act 766, which required the scheme to transfer 4 percent of pensioners’ funds to the second-tier fund managers. What this means is that the 17.5 percent of workers’ salary that was initially paid to SSNIT was slashed to 13.5 percent, with the remaining 4 percent paid to the fund managers.
However, workers who had already paid the 17.5 percent to SSNIT before the Act 766 came into force on December 31, 2009 did not have their accumulated 4 percent transferred to fund managers by SSNIT.
Subsequently, SSNIT proposed that the Past Credit up to December 2009 should be computed using 50 percent of the annual prevailing Treasury bill rate, and the interest from January 2010 also computed using 50 percent of the 91-day Treasury bill rate compounded quarterly.
Speaking at a Press Conference held by the Forum for Public Sector Registered Pensions Schemes, the Forum’s chairman, Isaac Bampoe Addo, said an analysis of the amounts paid pensioners does not tally with SSNIT’s claims. To him, even if it was the case, there should have been some definite deliberation between the Pension Reform Implementation Committee and the Trust that would receive approval from the NPRA Board before payment – but that was not the case.
“We wrote to the NPRA and asked if they had given approval to any formula by SSNIT for use in paying the Past Credit. and the answer was ‘no’. The NPRA told us they would write to SSNIT and get back to us. When SSNIT provided an answer to the public sector workers via a letter, it blamed challenges with its operating system – which paid out only 75 percent of accrued interest when calculations were done using the 100 percent T-bill rate compounded quarterly that was agreed on June 10, 2020,” Mr. Bampoe Addo said.
To him, this was shocking as no retiree was ever told that they were going to receive 75 percent of their Past Credit. “SSNIT strangely completed the calculations for full payment and paid the balance only after a Press Conference organised by the Forum on June 10, 2020.” He intimated that their call is to ensure SSNIT goes by the law in paying the Past Credit, and are demanding the NPRA must direct the Trust to obey the Pensions Act.
Some retirees who attended the press conference expressed disappointment at the actions of SSNIT, and could not fathom why their second-tier contribution, which is now a decade old, is paying double the amount SSNIT has paid as their Past Credit.
“After 27 years working, SSNIT paid me GH¢9,000; but the tier-2 that I contributed to for 10 years paid me over GH¢20,000,” said a retiree, Mohammed Abre. They also expressed worry at the computation of pension benefits, as the sum paid to them in some instances did not tally with the pension statement they received from SSNIT.