SSNIT Restructure Investment

The Social Security and National Insurance Trust (SSNIT) has indicated that it will venture into performing investment portfolios to ensure sustainable flow of revenue for the management of the pension scheme.

Since the end of 2010, the Trust has been making high yielding investments and this has led to the sale of companies such as The Trust Bank (TTB) and the offloading of 74 per cent shares in one of its key assets, Wahome Steel to Fujian Chinese Overseas Industrial Group.

“Since 2011 we have programmed ourselves to go into prudent investments and this is what we will be doing in the years ahead,” said Dr. Frank Odoom, Director-General of SSNIT when he interacted with editors of the various media houses in Accra on last Thursday.

Dr. Odoom stated that it has become necessary for SSNIT to bring dynamism into its investment portfolio as the new national pension law poses serious challenges to the SSNIT’s operations.

“Some gab has been created. We need to do better investment to make the scheme as solid as possible,” he said, adding that “what we need is to ensure that the investment yield the right returns to support the scheme.”

The management of SSNIT intends to partner developers in the construction industry in the coming years to build ultra-modern shopping malls in some parts of the country.

“We can see the growing middle class who have an appetite to shop in better malls.”
On housing, Dr Odoom noted that SSNIT intends to change its approach in building, adding, “we will invest but in a different manner.”

He explained that the new housing project will take the form of joint venture “because in the past people think because it’s a SSNIT house then they must have it for free.”
The investment portfolio of SSNIT has always been in the form of a mix asset in four main areas namely, real estate, listed and unlisted equities, fixed income and some economically targeted investments.

Stephen Yeboah, Chief Actuary, speaking on the mechanics of Social Security and the New pension Act 766, said since January 2010 there has been a reduction in the contribution rate from 17.5 per cent to 11 per cent and “this has resulted in a loss of contribution income by 41 per cent.”

The shortfall in contribution, he noted, implies that the Trust would have less capital for investment.

The improvement in life expectancy, he said, means that after retirement “many more pensioners will receive pension for a longer period thereby increasing the huge funding gap.”