The Social Security and National Insurance Trust (SSNIT), in consultation with the National Pensions Regulatory Authority (NPRA) and in line with Section 80 of the National Pensions Act,
2008 (Act 766), has indexed monthly pensions upwards by 12% for the year 2025.
This increment shall be implemented as
follows:
All pensioners on the SSNIT Pension Payroll as at 31st December, 2024 will have their monthly pension increased by an average of 12%.
This will be made up of a Fixed Rate of 8% plus a flat amount of GH¢72.58, which is the balance of 4% that is to be redistributed.
Redistribution is a mechanism applied to the indexation rate to cushion low-earning pensioners in conformity with the solidarity principle of social security.
As a result, pensioners will have
an effective increment between 32.19% at the bottom end and 8.04% at the top end.
Redistribution ensures that the minimum monthly pension of GH¢300 in 2024 will increase to GH¢396.58 in 2025, an effective increase of 32.19%.
The highest-earning SSNIT pensioner
who is under the PNDC Law 247, as at 31st December 2024 will receive GH¢201,792.37 per month in 2025, representing a percentage increase of 8.04%.
The average monthly pension as a result of the indexation, will increase from GH¢1,776.81 in 2024 to GH¢1,990.03 in 2025.
Given the 2025 indexation, approximately 63% of pensioners will receive an effective increase from 12% to 32.19%, to help maintain their standard of living.
This applies to those receiving GHS1,814.50 or less monthly.
Why Indexation?
The primary objective of the indexation is to maintain the purchasing power of
pensioners. SSNIT as prescribed by law works with NPRA to arrive at the right
indexation rate for pensions every year.
Indexation of pensions is thus an annual
requirement by law.
“The Trust shall annually review the pension payment which shall be indexed to wage inflation rates of active contributors or another rate determined by the Trust in consultation with the Board of the Authority”
As part of its mandate, SSNIT ensures that retired members under the Scheme
receive their pensions monthly and their pensions are indexed annually.
The rate of indexation for pensions therefore depends on
1. Average salary of active contributors from the previous year.
2. Annual average Consumer Price Index (CPI) from the previous year.
3. Affordability and the impact of indexation on the cost of pensions to the Scheme.
4. The effect of indexation on the long-term sustainability of the Scheme.
SSNIT Management with the Board of Trustees after considering the above factors
and consulting the NPRA for approval, then announces the indexation rate for
implementation.
