Director-General of the Social Security National Insurance Trust (SSNIT), Dr John Ofori-Tenkorang, the often-cited low pension payment is because Ghanaians earn low salaries.
Dr Ofori-Tenkorang revealed on the business edition of the PM Express on Thursday that some 25% of Ghanaian workers who contribute to the SSNIT scheme make as little as GHS400 Ghana cedis or less.
The monthly salary for a person earning the minimum wage of GHS8.8 is GHS264, meaning a quarter of Ghana workers earn a little above the daily minimum wage.
“50% of all the contributors said they were earning gross salaries of 1,000 Ghana cedis or less – In the formal sector. 71% of people in the formal sector say they are earning 1,800 or less,” the SSNIT boss read from a chart showing the distribution of monthly pensions versus salaries for February 2019.
Dr Ofori-Tenkorang said for Ghanaian workers to earn higher pension during retirement, allowances should be added to the basic salary.
According to him, that will increase the total income on which pension are deducted.
That, therefore, will require the amendment of the law regulating pensions but the National Pensions Regulatory Authority (NPRA) does not back the proposal for a review of the pension laws.
CEO of the NPRA, Hayford Atta Krufi, said on PM Express on MultiTV that there can be a national conversation about the proposal but the current law must be made to work.
“I believe that we need to get the law to work a little bit…because 2020 is actually where the first batch of those who came under Act 766 as amended will be going on mandatory retirement,” he said.
He said if pension payments become the result of agitations about low payouts, growth and sustainability becomes an issue.