Strong financial performance, responsible management evident at SSNIT

In its commitment to transparency and good governance, the Social Security and National Insurance Trust (SSNIT) is preparing for a seamless transition of management upon the expected appointment of a new Director-General, considering the change in Government.

However in recent times, SSNIT has been hit with two articles: Kofi Maafo Accused of Mismanagement and Nepotism at SSNIT, published on News Ghana on January 6, 2025, and RTI Slaps SSNIT with GH¢200,000 Fine for Non-Compliance, published by Ghana Business News on January 20, 2025.

These articles suggested mismanagement within SSNIT. However, available data indicate that the claims made in the two write-ups are misleading and do not accurately reflect SSNIT’s current trajectory or strong financial performance.

1. Proven Financial Strength

Instructively, SSNIT has consistently demonstrated robust financial performance under its current management. The Trust’s financial ratios for the period December 2021 to November 2024 illustrate significant improvements:

Financial Performance Ratios: December 2021 to November 2024

The current ratio, which measures the Trust’s ability to meet its short-term obligations, has steadily improved from 1.4:1 in 2021 to 4.5:1 as of November 2024. This remarkable progression underscores the Trust’s strengthened liquidity position and effective cash flow management, ensuring the timely payment of benefits and other financial commitments.

Again, administrative efficiency has also markedly improved, as reflected in the decline of administrative expenses as a percentage of total revenue from 9% in 2021 to just 5% in November 2024. Similarly, administrative expenses as a percentage of net contributions dropped from 10% in 2021 to 6% in 2024. These trends highlight the Trust’s commitment to cost optimisation and streamlined operations without compromising the quality of services provided to contributors and pensioners.

The personnel cost as a percentage of net contributions has also shown a positive trajectory, declining from 12% in 2021 to 7% in 2024. This demonstrates effective workforce management and prudent salary administration policies, which have contributed to the overall financial health of the Trust.

Finally, the ratio of total expenses (excluding benefits) to net contributions has decreased significantly from 18% in 2021 to 11% in 2024. This consistent reduction reflects SSNIT’s strategic focus on maximizing the value of contributions by minimizing non-benefit-related expenses.

SSNIT’s financial health is characterised by a strong current ratio and efficient cost management. This financial performance is driven by improved net investment income and net income surplus over the period.

Under the current leadership, SSNIT has positioned itself as a financially robust institution capable of navigating challenges while delivering value to contributors and pensioners alike.

2. Transparent and Targeted Corporate Social Responsibility (CSR)

Contrary to allegations of mismanagement, SSNIT’s CSR activities are aligned with its mission to support pensioners and the elderly. Reports indicate that SSNIT recently donated GHS 100,000 for a health screening programme for pensioners in the Akyem Abuakwa Traditional Area during the Okyenhene’s 25^th anniversary celebrations. This initiative was consistent with SSNIT’s policies and focus on improving the healthcare of pensioners.

Similar exercise was conducted last year by the Trust to screen over 1,678 pensioners across Accra, Kumasi, Koforidua, Takoradi, Tamale, and Sunyani, spending GHS 541,000 — an average of GHS 322 per pensioner.

The ratios below show a consistent decline in CSR spending as a percentage of income and assets.

CSR Ratios

The data on SSNIT’s CSR ratios from 2022 to November 2024 reveals a consistent and significant decline in CSR spending as a percentage of income, contributions, net surplus, and net assets. This trend demonstrates SSNIT’s deliberate shift toward prioritising operational efficiency and fiscal responsibility while maintaining targeted CSR initiatives.

The claim that the Director-General, Mr. Kofi Osafo-Maafo, mismanaged workers’ contributions is therefore unfounded as the gentleman has no ties to Akyem Abuakwa. He acted in line with SSNIT’s CSR priorities.

3. Rent Allowance Clarification

Regarding the rent allowance for the Deputy Director-General, Operations and Benefits, Ms. Juliana Kpadekpo, management in its response to News Ghana clarifies that allowances from March to June 2024 were legitimate as she lived in her private residence.

Payments made from July to October 2024 were mistakenly processed but were promptly halted. Currently, deductions for the overpayment of GHS 65,000 have already started. The deductions are made from her monthly salary, and any outstanding balance would be taken from her End of Service Benefits. This demonstrates SSNIT’s commitment to accountability.

4. Fair Promotions and Restructuring

Regarding the allegations of nepotism and improper personnel appointments, reports suggest that the recent restructuring at SSNIT was driven by proposals from Divisional Heads. These proposals were intended to address concerns raised by staff within their respective divisions and to enhance productivity and efficiency.

5. Dedication to Prudent Fund Management

SSNIT constantly reminds its stakeholders that it remains committed to the prudent management of pension funds, a claim supported by historical financial performance data. Indeed, the financial trajectory from 2015 to October 2024 underscores a resilient and strategic approach to fund management.

Despite challenges, such as negative returns recorded in 2016, 2018, and 2019, SSNIT’s decisive actions resulted in a significant recovery by 2020, with a surplus of GHS 1.14 billion. Although a setback was experienced in 2021 with a deficit of GHS 301.10 million due to the negative impact of COVID-19 on the Trust’s investee companies, the Trust rebounded with a surplus of GHS 230.11 million in 2022, further improving to GHS 864.56 million in 2023 and an impressive GHS 2.83 billion as of October 2024.

This consistent upward trend demonstrates SSNIT’s focus on effective portfolio management and resilience-building strategies. The ability to recover from periods of deficit and achieve sustained growth highlights the implementation of prudent financial policies, robust risk management frameworks and a dedication to maximising value for contributors and pensioners.

SSNIT remains committed to the prudent management of its pension funds, as evidenced by improvements in financial performance metrics and cost ratios. Management’s focus on efficiency continues to yield positive results for contributors and pensioners, as evidenced by the financial trajectory from 2015 to October 2024.

For instance, SSNIT successfully navigated significant challenges, including deficits in 2016, 2018 and 2019, to achieve notable financial surpluses, such as GHS 1.14 billion in 2020 and an impressive GHS 2.83 billion (unaudited) by October 2024.

The above highlights SSNIT’s commitment to prudent fund management, resource optimisation and financial discipline.