The Social Security and National Insurance Trust (SSNIT) faces the prospect of depleting its funds to meet future financial obligations to beneficiaries.
According to an International Labour Organisation (ILO) report, based on actuarial valuation, SSNIT reserves will be exhausted by 2036.
In the past, SSNIT operated as a Provident Fund, providing coverage for accidents, old age, disability, and death, as well as serving as emigration support.
According to ILO, total income including contributions, investment income and other income, will no longer be sufficient to pay for annual expenditures including benefit payments to pensioners by 2029.
“Starting in 2029, total income (contributions, investment income and other income) is no longer sufficient to pay for annual expenditures.
“The reserve starts to decrease. During the year 2036, the reserve drops to zero,” the research emphasised.
READ ALSO:
With no alternative sources of payment, SSNIT will rely solely on its reserves to fulfill payment demands, marking the beginning of the depletion process, the ILO stressed.
This trend is expected to persist until 2036, as indicated in the valuation report, when the reserve is projected to reach zero.
The reserve ratio, calculated as the end-of-year reserve divided by the annual expenditures, declines from 3.4 to 0 from 2021 to 2036.
This implies that the Trust will be unable to pay pension benefits if there are no contributions, investment income, or other sources of revenue.
Click here to read more about the evaluation report.