About 45 percent of Social Security National Insurance Trust’s (SSNIT) investment is generating negative returns, Vice President of Policy Think Tank, Imani Africa, Bright Simons has alleged.
Speaking on the Point Blank segment of Eyewitness News, Mr Simmons said: “When you look at how much SSNIT invests and the mechanisms through which it invests, you have to start becoming very worried. No wonder SSNIT itself says that in 14 years, it will run out of money… 45 percent of SSNIT’s investment now is trending towards negative returns. That is frightening.”
Mr Simons, therefore, advised SSNIT to urgently change its investment strategies to see a turnaround from its current bleak standing.
“SSNIT’s most profitable area is actually to go and compete with the Banks because when you look at its portfolio, it is the loans and things that are doing well. So we need to start reconfiguring the entire portfolio investment approach of SSNIT. That is very critical.”
Mr Simons explained that SSNIT, on paper, is in a good enough position to provide enough security to pensioners given Ghana has a huge advantage, with one beneficiary to almost 10 active contributors, but SSNIT “pays out benefits almost half of what it receives as contributions.”
Among questions, he queried why, “it [SSNIT] has over four million members but of that, only about 1.5 to 1.6 million are active contributors.”
He attributed this to government indebtedness, indicating that, “the government of Ghana owed SSNIT, for a while, nearly $150 million dollars and were defaulting and the private sector had only about 15 percent of the default rate and yet still, SSNIT had no strategy to go after the public sector.”
Mr Simons’ assessment resembled Vice President, Dr Mahamudu Bawumia’s bleak projections in 2016 when he promised an urgent review of SSNIT investments and costs to ensure its financial sustainability.
Dr Bawumia held that pensioners were under threat and that the World Bank in its 2016 report on governance of SSNIT, stated that the actuarial valuation shows that the fund will become a cash flow negative in 2019 and all assets will be used up by 2031.
As part of the urgent undertakings to ensure the sustainability of SSNIT, Dr. Bawumia said an NPP government will ensure that the funds of the National Pension’s Regulatory Authority will be applied solely for the purpose of the development of pensions and we will fully implement section 103 of the pension act which assigns pension benefits for housing of workers.
About five people are currently being investigated by the Economic and Organized Crime Office (EOCO) for their involvement in the acquisition of the OBS software.
It was initially thought the software was inflated to $66 million but the Director-General of the SSNIT, Dr John Ofori Tenkorang explained that the cost increased because it intermittently experienced challenges that required technicians to rectify.
Source: Citifmonline
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