The Eastern Regional Council of Labour has called on the government to suspend the implementation of past credit policy by Social Security and National Insurance Trust (SSNIT) until 2028 to allow more time for a redress of all concerns around the payment.
“Whereas recent decision of the government to hive off security services workers from the unified pension because of poor benefits; We, therefore, resolve that given that the aim of Act 766 was to improve the welfare of retirees but has made them worse off than when they were under the PNDCL 247, we call on the government to do the following: In order that no retiree is made worse-off, government, through the Social Security and National Insurance Trust (SSNIT) should top up the lump-sum benefit paid to all those who retired since January 2020 until the issues relating to past credit are resolved;
That government should suspend the implementation of the Past Credit until 2028 to allow the 2nd Tier scheme funds to yield adequate lump-sum and revert all workers back onto PNDCL 247 pension scheme.”
The Social Security and National Insurance Trust (SSNIT) announced June 11, 2020, that it has paid the difference in Past Credit due its pensioners as a result of implementing the agreement reached in a Memorandum of Understanding between government and sections of Organised Labour on the interest rate applied to the accrued Past Credit which is a one-time benefit for pensioners who are retiring under the National Pensions Act, 2008, Act 766.
“Specifically, the accrued Past Credit grows at the full 91 – day Treasury Bill rate, compounded quarterly, until the date of payment to the beneficiary. Consequently, a difference of ¢59,612,321.23 was paid to 19,918 pensioners”. SSNIT announced.
SSNIT said by this payment it has complied with the agreement signed by the Finance Minister, Employment Minister as well as representatives of sections of Organised Labour.
The implementation of the three-tier pension scheme (Act 766), mandated the Trust (first tier operator) to pay monthly pensions and the second tier fund managers to pay a lump sum which hitherto was being paid by the Trust under the Social Security Law (PNDCL 247).
However, workers affected by Act 766 who as of December 31, 2009 (i.e. the eve of the implementation of Act 766), had contributed to the SSNIT Scheme were entitled to a Past Credit.
The Past Credit constitutes 4% of contributors’ salaries, accumulated with interest from the dates on which the contributions were received by the Trust, up to 31st December 2009.
This Past Credit plus additional accrued interest, which has been adjusted from 75% to 100% of the prevailing Treasury bill rate from January 1, 2010, till the date of retirement is what is paid to the Member by SSNIT as part of their lump sum.
This application of 100% of the 91-day Treasury Bill rate compounded quarterly in determining the additional accrued interest is what has yielded the over ¢59 million additional payment to members who are receiving their pension under Act 766.
But a resolution by the Eastern Region Council of Labour after a meeting on Monday, September 14, 2020, said the implementation of the past credit must be suspended for a redress of various concerns on the policy.
It also called on the government to “expedite action on the validation and payment of investment in the collapsed fund management companies to investors by 30th November 2020” adding that “Since CAP 30 has yielded better benefits for beneficiaries, we urge the government to transfer all workers to CAP 30 or unify all 2nd Tier pensions under the Social Security and National Insurance Trust (SSNIT).”
Source: Mybrytfmonline/Obed Ansah