The Trades Union Congress (TUC) and Social Security and National Insurance Trust (SSNIT) are in a brawl over the computation of the benefits of pensioners.
According to TUC, the computation is inaccurate because it misinterprets the Pensions Law, resulting in low pensions, a situation that has rendered pensioners worse off and in unstable financial condition.
The framers of the law indicated that the lump sum is calculated as 25 per cent of monthly pensions for 144 months; whereas SSNIT calculates it as 25 per cent of monthly pensions for 83 months, instead of 144.
41.9% drop in annuity on lump sum
The difference between the application and non-application of annuity on lump sum equals 41.9%, according to the workers’ union.
TUC report indentifies gaps
TUC said an eight-member committee it set up to look into the current Pension Scheme, in its report, identified gaps in the computation of pension benefits by SSNIT for its contributors.
SSNIT rejects accusation
However, SSNIT has rejected the accusation, saying it computes benefits accurately in accordance with (PNDCL 247, Act 766 and Act 883) and on sound financial and actuarial principles and practices.
The workers’ union explained that the wrong computations affect how SSNIT recognises annual salaries, determination of annuities (regular allowance payments) and early retirement reduction.
TUC points out faults
The report faulted SSNIT for “wrong interpretation of what constitutes annual salary (36 months), early retirement reduction factor and annuity factor on lump sum,” describing it as “strange to the PNDC Law 247 and must be scrapped”.
TUC says SSNIT has misinterpreted Pension Law
The report further noted that “the SSNIT Pension is low because SSNIT has misinterpreted the Pension Law, which has resulted in low payment of pensions, thus making the contributors worse off”.
Paltry allowances and lump sums A member of the committee set up TUC, Mr Joseph King Adu said they found reason to debunk perceptions that low salaries of workers who contributed to SSNIT accounted for the paltry allowances and lump sums pensioners received. “The committee believes that it is a wrong perception. SSNIT has trumpeted this perception over the years to make people to believe that only low salaries are the cause of low pension annuity.
“The committee believes that, rather, it is because of SSNIT’s misapplication and misinterpretation of the law to the disadvantage of members,” he stated.
TUC wants NPRA intervention
The committee is of the view that SSNIT is not applying the law governing the pension scheme, and appealed to the National Pensions Regulatory Authority (NPRA) to compel SSNIT to compute pensions strictly based on the law and nothing else.
It argued that SSNIT has not been able to produce the legal basis for the definition of annual salary, early retirement reduction factor and annuity deduction. They only claim it is actuarial principles.
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