Ghana’s Pension Sector Set for Major Reforms Under SSNIT Director-General

Ghana’s pension sector is at a transformative juncture as Mr. Kwesi Afreh Biney, the Director-General of the Social Security and National Insurance Trust (SSNIT), introduces significant reforms. In a recent interaction with journalists from Ghanaian Democrat, he announced that all SSNIT pensioners on the payroll as of December 31, 2024, will receive an average monthly pension increase of 12%.

This increase comprises a fixed rate of 8% alongside a flat amount of GH¢72.58, representing the remaining 4% to be redistributed. Mr. Biney explained, “Redistribution is a mechanism applied to the indexation rate to cushion low-earning pensioners in conformity with the solidarity principle of social security.” As a result, pensioners will experience effective increments ranging from 32.19% for the lowest earners to 8.04% for those at the top end. The minimum monthly pension of GH¢300 in 2024 will rise to GH¢396.58 in 2025, marking a substantial increase of 32.19%.

The ongoing transformation of Ghana’s pension system has established a strong foundation for long-term savings mobilization, significantly contributing to GDP growth and the development of capital markets. Under Mr. Biney’s leadership and pension funds are increasingly diversifying their investments beyond traditional sectors like infrastructure and real estate, now exploring opportunities in sustainable energy projects, technology startups, and agricultural value chains. This diversification is poised to accelerate Ghana’s economic transformation further.

Mr. Biney has also shown commendable oversight in the regulatory sector, implementing stringent guidelines to safeguard contributors’ interests. His tenure has seen the introduction of a risk-based supervision framework that has bolstered the sector’s resilience, alongside initiatives focused on customer protection that enhance transparency and accountability. Nevertheless, there remains an opportunity for the regulatory framework to adapt to emerging challenges, particularly in the realms of cybersecurity and environmental, social, and governance (ESG) investment considerations.

This pivotal moment in Ghana’s pension sector signals a promising future for pensioners and the wider economy alike.

By: Frank Owusu Obimpeh