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The Social Security and National Insurance Trust (SSNIT) has been accused of adopting illegalities which have reduced the amount of money pensioners are entitled to by law.

These illegalities have been identified as disregard for annual salary in the selection of months for pension calculation, deductions associated with early retirement, wrong computations and annuity deductions.

General Secretary of Health Services Workers’ Union (HSWU), Reynolds Tenkorang told The Finder that the illegalities adopted by SSNIT have worsened an already pathetic plight of pensioners in the country.

He has, therefore, asked SSNIT to immediately stop the illegalities.

Pensions law
Section 36 subsection of Provisional National Defence Council (PNDC) Law, 247 of 1991 states that pension shall be based on average annual salary for the best three years of a member during his working life.

However, Tenkorang said a study conducted by the union has revealed that certain illegal factors have been smuggled into the computation of Security Pension.

Annual salaries
Salaries for public sector workers are increased every year and the best three years preceding retirement are the best annual salaries.

According to the union, SSNIT has disregarded the word annual from their documents and rather uses monthly salaries preceding retirement to constitute three years’ annual salaries.
Therefore, a member who retires on April 1, 2017 will, for example, have nine months’ salaries counted in 2014, four years preceding retirement, which makes the member worst off, he explained.

According to him, this means that any Ghanaian worker who retires in any other month aside December is being cheated by SSNIT.
On the other hand, other pension schemes operating in Ghana, such as CAP 30, Police Pension and Ghana Universities Staff Superannuation, also compute pension based on annual salaries as declared on pay slips, and not monthly salaries.

Annuity factor
SSNIT has imposed annuity on the payment of lump sum, which cumulatively reduces lump sum for 12 years by 41.9%, even though annuity is not in the PNDC Law 247 of 1991 which regulates pensions in Ghana.

According to Tenkorang, this explains the low lump sum SSNIT pays to pensioners.

To buttress his point, he stated that CAP 30, Police Pension and Ghana Universities Staff Superannuation are also paid gratuity, but annuity is not deducted because annuity is not part of the calculations.

Early retirement
Section 34 of PNDC Law 247 of 1991 states that there shall be reduced pension when a member retires from ages 55 to 59, but the union points out that since there is no Legislative Instrument (LI) that spells out the modalities and formula, the deductions by SSNIT are illegal.

It has been established that contributors who retire at age 55 years have their lump sum reduced by 40% because of the illegal formula adopted by SSNIT, he added.

Errors in computation
Tenkorang revealed that another worrying development is that the union, through its monitoring, has detected many anomalies in the payment of benefits because computations used turn out to be wrong.

As a result, he said the union has set up a Welfare and Pension Desk to monitor the payment of the benefits to members, and anytime petitions are submitted to the Director General of SSNIT, refunds are made to beneficiaries.

Evidence of lump sum computation errors
He showed documents which confirm that several workers who filed complaints with the union received refunds.

For example, one retired worker who was paid GH₵9,000 as lump sum was later paid additional GH₵17,000 when the union petitioned SSNIT Director General on wrong computations.

A woman was paid GH₵3,000 instead of GH₵27,000.

Another worker who was short-changed by GH₵26,000 in the payment of lump sum also received a refund after the union identified the wrong calculations and petitioned SSNIT.

A worker who retired in 2012 was paid GH₵1,032 as lump sum but was later paid an extra GH₵12,000 when the anomaly was detected.
Another example is a worker who was paid GH₵4,000 lump sum, but later received additional GH₵6,000 when the wrong computation was detected by HSWU, Tenkorang lamented.

The National Pensions Act define a benefit scheme as a pension scheme providing a defined benefit formula for calculating benefit amounts without regard to contributions.