Abstract:
Pension reforms in Ghana have been carried out over the years with the emphasis always on the
benefits to be paid to the members of the scheme. Extant literature on the current three tier pension
scheme in Ghana indicates much that attention has not been paid to the scheme’s sustainability
and solvency as well as the financial viability of SSNIT. The study found to examine the extent to
which the current reforms have affected the financial viability of SSNIT as an institution and also
assesses which of the two pension laws of Ghana makes beneficiaries better off. The study adopts
a mixed method which consist of both quantitative and qualitative methods. Primary data in the
form of questionnaires and interviews that were gathered from pensioners and the actuary
department of SSNIT on the new pension reforms. Secondary data was from SSNIT financial
statement and other management reports. The descriptive statistics showed majority of the
respondents indicated that the amount of pensions paid to them is not enough to enhance their
living standards hence, not sustainable. The transfer of 5% contribution to second tier fund
managers does not have any effect on SSNIT in the short term. Also, SSNIT beneficiaries are
better off in receiving their benefits. This is because the index rate is greater than the inflation rate.
It also concludes that the scheme has remained solvent over the period but it is close to reaching
equilibrium where total income will be equal to total expenses. SSNIT is facing the challenge of a
reduction in the amount of contributions received to 11%. The 11% will not be adequate for
SSNIT. The respondent further explained that very soon what SSNIT will be getting in terms of
contribution is just enough to pay benefits and as benefits is growing. The study recommends that
education on the new pension scheme should be done as many contributors lack knowledge about
the new scheme and how it functions. Proper assessment of the new pension reforms to ensure that
SSNIT does not arrive at a deficit in the future.
