Introduction

While Social Security in Europe was a direct consequence of the Industrial Revolution, in Ghana
and many other African countries, it was the result of a combination of factors such as
colonization, industrialisation and urbanization.

Colonisation and the introduction of new methods of work transformed the traditional structures
and working conditions resulting in the development of paid employment in the urban areas. The
Ghanaian wage-earner and his family were uprooted from their traditional environment and
exposed to social contingencies similar to those which prevailed in the industrialized countries
with the advent of the Industrial Revolution in the 18th Century.

Pre-Independence Social Security

Prior to the establishment of a Social Security Scheme in Ghana in 1965, private schemes had
been established to develop for the urban wage-earners – a rudimentary system of material
security.

Before Ghana’s independence, there was neither a national nor a uniform Social Security
Scheme in the country. There were public and private schemes which catered for the security of
various categories of workers. For example, in 1940, the adoption by the country of the
International Labour Organisation’s (ILO) Convention on Workers, made cash benefits payable
to workers who suffered work injury.

By the Pension Ordinance of 1946, a non-contributory Pension Scheme was established for
workers categorized as African Senior Civil Servants which extended in a limited extent to their
widows and orphans.

In 1955, by the Teachers’ Pension Ordinance, certified teachers were made coverable under the
Ordinance of 1946. The senior members or lecturing staff of the country’s premier University –
then the University of the Gold Coast – also had a Private Superannuation Scheme.

Meanwhile, some organisations in the private sector, especially the major foreign trading and
commercial firms were operating Superannuation, Pension and Provident Fund Schemes under
which benefits were paid out at the time of retirement of their African Senior employees.

Further, ex-gratia awards were available for some workers who were not coverable under any of
the above-named Schemes. These Schemes also had limited contingencies.

Post Independence Social Security

On attaining independence in 1957, Ghana embarked upon an intensive industrial and
educational programme. The net result was a large influx of people to the cities and urban areas
in search of white-collar jobs.

The social, economic and political challenges created by the rural-urban migration were
unimaginable. The worker who had been alienated from his roots and thus stripped of the
security offered by the traditional extended family system faced a grim future – that of
insecurity. To address this unsatisfactory situation, the Government of the First Republic
instituted the Compulsory Savings Scheme and later, the Social Security Scheme.

Compulsory Savings Scheme

The Compulsory Savings Scheme came into being in the early 1960s. Under the Scheme,
compulsory deductions were made from the wages and salaries of all workers and paid into
Government chest with the promise to workers that the savings would be paid back to them with
interest.

Due to lack of education on the Scheme, many workers developed an apathy to it. This attitude
was made worse by the inefficient system for refund under which many workers failed
eventually to withdraw their savings. In 1965, this scheme was abolished.

Ghana on the Eve of Social Security Act

In retrospect therefore, the Compulsory Saving Scheme was a major first step in the development
of Social Security in Ghana and its effect on the Social Security Scheme cannot be ignored. As
far as the psychological profile of contributors was concerned, the effect was devastating.

The history of Ghana’s Social Security Scheme dates back to the appointment of the Asare
Committee. The then Managing Director of the Ghana Commercial Bank, Mr. T.O. Asare in
1960 was tasked to look into the possibility of establishing a National Pension and Insurance
Scheme for workers. The Committee was assisted later by an International Labour Organisation
(ILO) expert on Social Security matters, Mr. A. Zelenka.

The President of the First Republic, Osagyefo Dr. Kwame Nkrumah, while opening the Trade
Union Hall in Accra in 1960, announced that “Government was giving consideration to the
possibility of establishing a National Pensions and Insurance Fund to manage the Pension and
Provident Fund of all workers irrespective of their employers.” This showed the Government’s
willingness to introduce Social Security In Ghana.
On 17th February, 1965 the Parliament of the First Republic passed a Bill known as The Social
Security Act, 1965, Act 279 to establish a Social Security Fund to provide for contributors,
benefits under Superannuation, Invalidity, Survivors, among others.

The country thus witnessed a landmark improvement in the life of workers in the country. For
the first time, a Social Security Scheme of national dimension was provided for workers.

What is Social Security?

“Social Security may be defined as any programme of social protection established by
legislation, or any other mandatory arrangement, that provides individuals with a degree of
income security when faced with the contingencies of old age, survivorship, incapacity,
disability, unemployment or rearing children” – (ISSA definition).

Early Administration
During the early years of the Fund, the administration was under a Department of Pensions and
National Insurance. However, the functions were split and assigned to two bodies. The State
Insurance Corporation (SIC) supervised the Inspectorate and Operational Divisions while the
Department of Pensions under the Ministry of Finance was in charge of Policy and General
Administration. Mr. C.K.F. Adapoe was the first Chief Administrator of the Social Security Fund
Administration. Mr. C.K.F. Adapoe was assisted in the day-to-day administration by an initial
staff numbering 37 in 1965.

SOCIAL SECURITY SCHEME OF 1965

The Social Security Scheme of 1965 was a Provident Fund (PF) Scheme under which lump sums
were paid to qualified members. Contribution to the scheme was at the rate of 7.5% by the
worker and 15% by the employer from 25th May, 1965 to July 31, 1966. From 1st August, 1966,
the contribution rates were reduced to 5% and 12.5% by the worker and employer respectively,
after an outcry of high contribution rates.

The Scheme was intended to operate as a Provident Fund for a five-year period (1965 to 1970)
and thereafter be converted into a Pension Scheme for periodic monthly payments.

The Provident Fund system was very popular with the workers because inflation was very low.
Successive governments also found the Fund a ready source of capital for budget deficit
financing. So acceptable was the Provident Fund system that even in 1972 when the NRCD 127
was passed, it only established a Body Corporate i.e. the Social Security and National Insurance
Trust (SSNIT) to administer the Fund which was hitherto managed by the State Insurance
Corporation (SIC) a government commercial insurance institution.

The Provident Fund was therefore, continued by this Decree and no consideration was given to
its conversion to a Pension Scheme until the late 1980’s when real value of benefits were
obviously eroded by the considerably high rate of inflation, that the issue was seriously taken up.

Key Features of the Scheme – (1965 – 1972) Contingencies

• Sickness Benefit – when the member is unable to earn an income due to sickness.

• Emigration Benefit – when the worker emigrates permanently from Ghana.

• Survivors and Life Insurance Benefit – paid to the nominees of a deceased member.

• Invalidity Benefit – when a member of the fund is rendered permanently incapacitated or

mental disability to be incapable of gainful employment.

• Superannuation Benefit – This is the old age benefit paid on the retirement of a worker. The
retirement age was 60 for men and 55 for women. However, the Social Security Decree, 1972
reduced it to 55 for men and 50 for women.

A member was qualified for Interim Superannuation Benefit at age 50 and 45 for men and
women respectively. Terminal benefits were paid at the point of disengagement at ages 55 and
50 for men and women respectively.

• Unemployment Benefit – when a member became unemployed.

All the six (6) Benefits were lump sum payments.

About 90,000 members received various types of Benefits between 1965 to 1971

INTRODUCTION
The Social Security and National Insurance Trust (SSNIT) is a statutory public Trust charged
under the National Pensions Act, 2008 Act 766 with the administration of Ghana’s Basic
National Social Security Scheme. Its mandate is to cater for the First Tier of the Three-Tier
Pension Scheme. The Trust is currently the largest non-bank financial institution in Ghana.

The primary responsibility of the Trust is to replace part of lost income of workers in Ghana due
to Old Age, Invalidity or Death of a member where dependants receive lump sum payment. It is
also responsible for the payment of Emigration benefit to a non-Ghanaian member who is
leaving Ghana permanently.
The Pension Scheme as administered by SSNIT has an active membership of over 1.6
million as at January, 2021 with over 226,000 pensioners who regularly receive their
monthly pensions from SSNIT.

THE TRUST
The Trust was established in 1972 under NRCD 127 to administer the National Social Security
Scheme. Prior to 1972, the Scheme was administered jointly by the then Department of Pensions
and the State Insurance Corporation.  The Trust administered the Social Security Scheme as a
Provident Fund Scheme until 1991 when it was converted to a Social Insurance Pension Scheme
then governed by the PNDC law 247. The scheme in Ghana was reformed by an Act of
Parliament, Act 766 of 2008 and was implemented in January 2010 to replace all pension
schemes in Ghana including Cap 30. In 2014, the National Pensions (Amendment) Act 883 was
passed to amend portions of Act 766.

VISION
“To be the model for the administration of Social Protection Schemes in Africa and beyond”.

MISSION
“To provide income security for workers in Ghana through excellent business practices”.

THE CORE FUNCTIONS OF SSNIT

 Register employers and workers
 Collect contributions
 Manage records on members
 Invest the funds of the Scheme
 Process and pay benefits to eligible members and nominated dependants.

 THE CORE VALUES OF SSNIT

 Professionalism
  Leadership
 Integrity
 Customer focus
 Commitment
 Innovation
 Teamwork

THE BOARD OF TRUSTEES

The Board of Trustees are responsible for the policy direction of SSNIT. The Trustees are made
up of representation from government, employers and workers. It is constituted as follows:

1. A Chairperson
2. Two persons nominated by the President, at least one of whom is a woman
3. Two representatives of Employers’ Associations,
4. Four representatives of Organised Labour
5. One representative of the Ministry responsible for Finance not below the rank of a Director
6. One representative of the Security Services who is not a member of the Ghana Armed Forces
7. One representative of the National Pensioners’ Association and
8. The Director General of the Trust

The members of the Board of Trustees shall be appointed by the President in accordance with
Article 70 of the 1992 Constitution.

ADMINISTRATION
The day-to-day administration of the Trust is headed by the Director General assisted by three
(3) Deputy Director Generals (DDGs).

There are seven (7) General Managers in charge of Investment and Development (IDD),
General Counsel (GC), Finance, Operations, Administration and Human Resources
(ADMIN/HR), Management Information Systems (MIS) and Benefits.  Other responsibilities
under the Directorate include that of the Chief Actuary, the Chief Internal Auditor, the
Company Secretary and the Corporate Affairs Manager.

HOW SSNIT OPERATES

SSNIT has a decentralised operational system made up of the Area, Branch, Day Offices and an
Agency. An Operations Coordinator at the Head Office co-ordinates all operational activities and
reports to the General Manager, Operations.

There are eight (8) Area Offices, fifty-one (51) Branches, twenty-three (23) Day Offices and an
Agency spread throughout the country.

THE BASIC NATIONAL PENSION SCHEME (TIER-1)

National Pension Act (2008) Act 766

Act 766 makes provision for a contributory 3-Tier Pension Scheme and the establishment of a
National Pensions Regulatory Authority (NPRA) to oversee the administration and management
of the Pension Schemes. Under the Act, SSNIT is to manage the basic National Social Security
Scheme referred to, as the 1st Tier of a contributory 3-Tier scheme.

The other Tiers of the National Pensions Scheme are:

 Tier 2 – A mandatory fully-funded and privately managed occupational scheme.

 Tier 3 – A voluntary fully-funded and privately managed Provident Fund and Personal
Pension Plan.

FEATURES OF Act 766

 Mandatory for all workers in the formal sector and optional for self-employed.
 Tier 1 – A mandatory basic contributory Social Security Scheme managed by SSNIT.
 Tier 2 – A mandatory fully-funded and privately managed occupational scheme.
 Tier 3 – A voluntary fully-funded and privately managed provident fund and personal
pension plan.

Contribution Rates under the Social Security Scheme ( Tier 1)

 – Employer – 13.0% from worker basic salary

 – Worker – 5.5% from workers basic salary
 – Total – 18.5%
 Out of the 18.5%, the employer remits 13.5% within 14 days of the ensuing month to
SSNIT. 5% is remitted to the Second-Tier Mandatory Occupational Scheme.

 Subsequently, SSNIT also gives 2.5% out of the 13.5% to the National Health Insurance
Authority (NHIA) for the member’s Health Insurance.
  SSNIT effectively withholds 11% for the administration of Tier 1.
 Entry Age of joining the scheme– 15 years (minimum) and 45 years (maximum) only
for new entrants (age 45+ to enter mandatory 2nd tier).
 Age Exemption – 55 years and above exempted (option to join)
 Minimum and Maximum contributions indicated and reviewed periodically.
 Investment of Funds – investment policy, external investments permitted.

BENEFITS & QUALIFYING CONDITIONS.

Four (4) Benefits


o Superannuation Pension
o Invalidity Pension
o Survivors Lump Sum
o Emigration Benefit

Qualifying Conditions

 Qualifying period of 240 months (20 years) reduced to 180 months (15 years)
 Guaranteed Survivors benefits payment period increased from 12 to 15 years.
 Increase in guaranteed pension payment period from 12 to 15 years. That is 72 to 75
years
 Hazardous employment benefit – underground miner to retire at age 55 with full
retirement benefit.
 Must be between 50 and 60 years to benefit.
o It is a Defined Benefit
o Return of contributions plus interest is given when one does not qualify for any of
the two (2) benefits.
o Established a Regulator which is the National Pensions Regulatory Authority
-NPRA.

 KEY FEATURES OF PNDC LAW 247 

The highlights of the PNDC Law 247 include:

 Provision of three (3) benefits – Old Age Pension, Invalidity Pension and Death and
Survivors Lump Sum benefit.
 Pensions are paid monthly to qualified members.
  It was financed through employer and employee contributions of 12.5% and 5% of basic
salaries respectively. The resultant 17.5% is paid solely to SSNIT.
 Full pension is earned at age 60 with a minimum contribution of 240 months (20years).
 Reduced Pension is earned between 55 and 59 years with a minimum contribution of
240 months.
 A 25% Lump sum Payment Option was available for both Full and Reduced Pension.
This is paid at the present value discounted at the prevailing Treasury bill rate.
 Invalidity Pension is earned after 12 months contribution within the last 36 months
and member must be declared permanently invalid by a recognized medical officer and
certified by a Medical Board.
 Survivors’ Lump Sum is paid to dependants of a member who dies before retirement or
when a member dies while a pensioner before attaining age 72.
 Minimum accrual rate was 50% and the maximum was 80% of three best year’s average
salary. A return of contributions accumulated at a prescribed interest rate is given to
unqualified contributors.

 Pensions are indexed or reviewed annually.

THE TRUST’S OBLIGATION 

Social Security and National insurance Trust manages the 1st tier of the 3 tier Pension Scheme.
SSNIT has over the years administered Social insurance in Ghana and workers have been well
catered for upon retirement and injury under the scheme. All activities undertaken by SSNIT are
within the confines of the Law.

The Social Security and National Insurance Trust (SSNIT) is currently charged with the
administration of Ghana’s Basic National Social Security Scheme. Its mandate is to cater for the
first Tier of the Three-Tier Pension Scheme. The primary responsibility of SSNIT is to replace
part of lost income of workers in Ghana.

Therefore the TRUST is mandated by law to;

1. Operate the Basic Social Security Scheme which is the 1st tier.
2. Ensure general administration of the Social Security Scheme and Regulations.
3. Keep a Fund for contributions and other cash received.
4. Provide Social protection for working population for contingencies including old age,
invalidity, death and emigration.
5. Administer and invest funds of the Scheme under general directions of Board of Trustees
and approved by the National Pensions Regulatory Authority (NPRA).
6. Collaborate with other complementary social protection schemes to achieve efficiency,
cost savings and avoid duplication of functions.
7. Operate other Schemes that may be prescribed by Law.
SSNIT also registers establishments and employees to furnish them with unique Establishment
Registration (ER) and Social Security numbers respectively.

These numbers are not transferable and shall be used by employers and employees throughout
their transactions with SSNIT.

The Trust is to ensure that;

 Contributions are paid regularly by employers on behalf of employees.

 Recalcitrant employers who refuse to pay contributions on behalf of its employees are
sanctioned.
 Reserved funds are invested prudently
 Accurate data of its members is kept and managed appropriately
 Benefits are paid accurately and promptly to members.

National Pensions (Amendment) Act, 2014, Act 883

An Act to amend the National Pensions Act 2008 (Act 766) to reduce the age for exemption
from the First Tier Scheme, Act 766 and to provide for related matters.

1. Reduction in the Age Exemption

Members who were 55 years and above as at January 2010 were exempted from Act
766. Members aged 50-54 years who were affected by Act 766 were made worse off.
Hence the implementation of National Pensions (Amendment) Act 2014, Act 883.
Members who were aged 50 as at 2010 have now been exempted from Act 766. This
means that all those exempted will continue to contribute 17.5%. They will also be paid
the full benefit namely, monthly pension and the 25% lump sum by SSNIT. Despite the
reduction in the age exemption from 55 to 50 years, it is still optional for any such
member to decide to join the Act 766.
2. Correction of the formulas for computation of Pensions
The Amendment Act 833 also corrected the formula for the computation of pensions by
providing that the minimum 15 years or 180 months period of contribution entitles a
member to 37.5% pension right and every additional twelve (12) months contribution
entitles the member to 1.125% pension right up to a maximum of 60%.
3. Emigration Benefit
Emigration benefit is a lump sum payment of benefits to non-Ghanaian members of the
Social Security Scheme under Act 766 whose services are ended and are leaving Ghana
permanently. Whether the member has reached the retiring age or not, whatever benefit is
due him/her will be paid as lump sum in Ghanaian currency to the member.
4. Employers to furnish information by SSNIT within Seven (7) working days
The Amendment provides that, where SSNIT officials request an employer to furnish any
information relating to the employer, the employer shall furnish the information within
seven (7) working days.