How To Boost Your SSNIT Monthly Pension As Unemployed Or As Student Or For A Relation

The monthly pension payments by SSNIT is partly influenced by the number of years a member contributed to determine a percentage a member qualified for and the monthly SSNIT is also partly influenced by a member’s highest three years’ salary (ie sum of three highest salaries divided by 3) to determine the averaged salary of which the member is entitled to its percentage.

Any unemployed can only influence the number of years SSNIT would use to calculate the percentage a SSNIT would use to determine the monthly pension. Also, any regular income earner can influence the SSNIT monthly pension payments to their relations (wards, spouses, siblings etc) who are now unemployed.

According to the pension act, every one year contribution within the first 15 years to SSNIT entitled a member to 2.5% and every extra year contribution entitled the member to 1.125%. For instance when a member contributed for 35 years, he/she would be entitled to 37.5% for the first 15 years (2.5% x 15years = 37.5%) plus 22.5% for the last 20 years (1.125% x 20years = 22.5%). Therefore such a member who contributed for 35 years would be entitled to 60% (ie 37.5% + 22.5% = 60%) of the averaged best three salaries.

In this regard, the more years a person could not contribute to SSNIT, the more valuable percentage they are loosing especially when the person is older than 25years. The maximum SSNIT percentage any individual can get is 60% with 35 years contributions and the minimum SSNIT percentage one can claim is 37.5% with 15 years contributions. A member therefore needs to start contributions from age 25 year to be able to contribute for 35 years upto retirement to claim the maximum SSNIT percentage of 60%.

In the even an individual is unemployed or in the event the individual works in the informal sector without the employer paying his or her pension, what can such individual do to obtain the maximum or near maximum SSNIT percentage? What can those who lost their jobs also do concerning their SSNIT percentage?

Currently, SSNIT has an informal sector pension scheme that allows those who are not on formal sector payroll to also contribute towards their pension. This informal sector SSNIT scheme allows members to walk into any SSNIT office and contribute 13.5% of their declared monthly salary. However this declared monthly must not be lower than the monthly minimum wage which is Ghc365.00 now in 2022. And since the individual is unemployed (or individual receives a meagre salary in the informal sector), it is only ideal/logical to quote the monthly minimum wage as his/her declared salary. 13.5% of Ghc365.00 is thus Ghc49.28.

With Ghc49.28, any unemployed or housewife or anyone whose SSNIT is not being paid, any individual can contribute the Ghc49.28 monthly to SSNIT to accumulate the more valuable SSNIT percentage used in calculating the SSNIT monthly pension since every extra year an individual delays in paying SSNIT contributions means that individual would further reduce his/her SSNIT percentage at the age of retirement.

Having known this, remember that no matter how much your earn up to retirement, you would not get the maximum SSNIT percentage that you would have obtained if you do not start contributions from the age of 25 years. The longer you delay after 25 years the less percentage you would get

READ: Disturbing reasons why your SSNIT pension will be “small” and what to do

In addition, since the minimum number of years people need to contribute to SSNIT to qualify for SSNIT monthly pension is 15 years (which gives 37.5% SSNIT percentage) it is advisable those have lost their jobs but have ever contributed to SSNIT to also take advantage of this approach to avoid loosing out on the SSNIT monthly pension. Anyone who could not contribute for the minimum 15 years would receive a refund of his/her contribution together with interest calculated using current TBill rates