The Social Security and National Insurance Trust (SSNIT) has announced a 12% increase in pension payments as part of its annual review, effective from January 2025. This adjustment aims to boost monthly payouts for retirees.
The 12% pension increase follows a collaboration with the National Pensions Regulatory Authority (NPRA) and is in accordance with the National Pensions Act of 2008 (Act 766). All valid pensioners on the SSNIT pension payroll as of the end of December 2024 will see their monthly pensions increase by an average of 12%.
This increase will consist of a fixed rate of 8% plus a flat amount of GHS 72.58, which accounts for the remaining 4% to be redistributed. As a result of this increase, the lowest-wage pensioner will receive GHS GHC396.58, representing a 32.19% increase over the 2024 minimum pension payment.
The highest-earning pensioner under PNDCL 247 and Act 766 will now receive GHS 201,792.37 and GHS 28,703.01 per month, respectively.
SSNIT implements this upward adjustment to preserve the real value of pensions, helping beneficiaries manage economic pressures better. The primary purpose of this indexation is to maintain the purchasing power of pensioners.
As mandated by law, SSNIT collaborates with the NPRA to determine the appropriate indexation rate for pensions each year. This annual review of pension payments is, therefore, a legal requirement.
According to the law, “The Trust shall annually review the pension payment, which shall be indexed to wage inflation rates of active contributors or another rate determined by the Trust in consultation with the Board of the Authority.”
As part of its responsibilities, SSNIT ensures that retired members under the Scheme receive their pensions monthly and that these pensions are indexed annually.
The rate of indexation for pensions depends on several factors:
- Average salary of active contributors from the previous year
- Annual average Consumer Price Index (CPI) from the previous year
- Affordability
- The impact of indexation on the overall cost of pensions to the Scheme
- The effect of indexation on the long-term sustainability of the Scheme.