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.



        Background of the Study

A Pension as defined by the International Monetary Fund (IMF) refers to a series of monetary payments made to a worker or his/her surviving relatives following retirement whereas pension schemes are defined as the set of financial, administrative, legal, social, and other arrangements established for the purpose of providing pensions to a designated group of workers and their survivors. From the above definition, it is obvious that the goals of pension schemes and social protection programs mostly intersect. According to the International Labor Organization (ILO) Social protection is defined as any program or set of programs that measures providing assistance or benefits in cash or in kind to ensure income security and access to some basic human needs mainly health care. More so, social protection, include access to key services, such as education, social work and social care, as well as other measures, including labour market polices (ADB, 2001; World Bank, 2012; UNDP, 2016a).

Governments are under social obligation to establish such Social Protection Programs that are aimed at lowering poverty or providing income protection in old age or the occurrence of contingencies such as a worker becoming invalid during the course of his employment. In Ghana for instance, the Ghana National Social Protection Strategy (GNSPS) also known as the National Social Protection Strategy (NSPS) was commissioned in the year 2007 with the core mandate of reducing poverty inequality as well as improving the livelihood of Ghanaians.

Most public social protection schemes usually aimed at poverty alleviation and women empowerment are usually financed through the monetary contributions of individuals and/or employers via pension schemes or through taxes or tax-financed schemes (UNDP, 2016).

A social Security System is a type of social protection system which can be either contributory or non-contributory. Contributory, as the name suggest means that persons make continues contributions towards into a fund for a defined period of time to qualify for a benefit. Non- contributory systems are funded mainly by the taxes paid by the people (Barrientos & Lloyd- Sherlock, 2002). Social security systems can either be state sponsored or privately sponsored by employers (Bonoli, 2003). The Ghanaian model of social security lays the responsibility of sponsorship on the state, through the social security and national insurance trust (SSNIT). There is however a number of employers that provides private pensions to their employees.

According to the ILO in the World Social Security Report (2010/11), the biggest risk most individuals faces at old age is either poverty or income insecurity as a result of his inability to earn income either partially or completely. Therefore, pension system becomes the vehicle of replacing incomes of such individuals in their old age or upon the occurrence of certain unforeseen contingencies. Contingencies under which a person qualifies for a pension in Ghana are when a member is of age (Old Age Pension), becomes invalid (Invalidity Pension). The pension scheme also provides that upon the death of a member or a pensioner a lump sum is paid to his beneficiaries (Survivors Benefit) (National Pensions (Amendment) ACT, 2014 ACT 883).