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Workers who turn 60 years from January 1, 2020 will no longer receive lump sum payments from the Social Security and National Insurance Trust (SSNIT) under PNDC Law 247.
Such contributors will now have to turn to the fund managers of their second tier contribution for lump sums.
However, the Director-General of SSNIT, Dr John Ofori-Tenkorang, who disclosed this at a breakfast meeting with some employers in Accra Thursday, said in addition to the lump sum from the second tier, SSNIT would pay a lump sum known as “past credit” accruing from earlier contributions by such workers before the coming into force of the National Pensions Act, 2008 (Act 766), which introduced the tier two.
Even though the law was passed in 2008, it was operationalised in 2010.
“In addition to that, SSNIT will also pay a monthly allowance to such workers. This is the message we want you to convey from here.”
“As you may know, PNDC Law 247, which enjoins us to pay the 25 per cent lump sum to contributors, sunsets in December 2019. The last group of such workers will turn 60 years by December 31, 2019.
“This implies that all workers who turn 60 from next year will have their benefits processed under the three tier pension scheme (Act 766),” Dr Ofori-Tenkorang told the employers.
He, therefore, advised employers to help their employees access their lump sums from their second tier fund managers “because you know where they are”.
The breakfast meeting was to afford SSNIT the opportunity to thank employers for being religious with their SSNIT contributions for their employees and also solicit their continuous contributions to enable it to meet its obligations to pensioners.
It was meant to create a platform for employers to air their concerns and to give the management of SSNIT the opportunity to clear any doubts and ambiguities that had been lingering in the minds of employers and the public.
It was also to strengthen the relationship between SSNIT and employers, deepen employers’ understanding of the operations of the first tier scheme (SSNIT) and help them appreciate the value of social security contributions they paid for their workers, as well as the positive impact it had on the economy.
The SSNIT Director-General gave an assurance that the management of SSNIT remained focused on the core mandate of the trust and would deliver on the obligation to workers and all contributors.
He announced that the trust spent over GH¢250 million monthly in paying pensions and appealed to employers to continue to remain faithful with the trust by dutifully paying the contributions of their employees.
He said the trust could not meet any of its obligations to pensioners without employers.
“We recognise the critical link you provide between the trust and workers. Even though social security contributions are paid for employees, you are the ones who do so, on their behalf.
“When you deduct 5.5 per cent from their salaries, you add your portion of 13 per cent, and over the last 12 months you have remitted the 13.5 per cent to SSNIT regularly,” he told the employers.
He commended employers for not only fulfilling their civic responsibility but also contributing to the sustainability of the national pension scheme.
“So, on behalf of my team and my good self, I would like to specially commend you for your model behaviour in paying these social security contributions and I encourage you to continue on this path,” Dr Ofori-Tenkorang told the employers.