The Social Security and National Insurance Trust (SSNIT) has announced a hefty 15% increase in monthly pension payments effective January 2024.
This significant bump aims to cushion pensioners against the rising cost of living and reflects the Trust’s commitment to their well-being.
The increase was determined in accordance with Section 80 of the National Pensions Act, 2008, (Act 766) following a comprehensive review. Every valid pensioner on the SSNIT payroll as of December 2023 will benefit from this boost, composed of a fixed 10% rate adjustment and a redistributed flat amount of ¢79.10.
This translates to a substantial improvement across the board. The minimum-wage pensioner, for instance, will see their monthly income jump by a remarkable 36.37% to ¢409.10, offering much-needed support against inflation pressures. Even the highest-earning pensioner will receive a generous bump, with their monthly income rising to ¢186,777.58
Joseph Poku, Chief Actuary at SSNIT, emphasized the collaborative effort with the National Pensions Regulatory Authority (NPRA) in reaching this decision. Their primary goal, he explained, was to strike a balance between protecting pensioners from inflation and ensuring the scheme’s sustainability.
Mr. Poku highlighted that the 15% increase factors in the projected 20% wage inflation for active contributors and the 23.16% inflation rate forecast for 2024.
The average monthly pension will see a welcome boost, going from ¢1,527.29 in 2023 to ¢1,756.38 in 2024. However, this measure does come with a cost.
The 15% indexation rate is estimated to translate to an additional ¢697.64 million in pension expenditure, bringing the total expenditure for pensioners in 2024 to ¢5,387.72 million.