Social Security and National Insurance Trust (SSNIT) is in line to have a total diminishing of their reserves to meet future financial responsibilities to their contributors.
In a report by the International Labour Organization (ILO), which centered on the actuarial valuation, indicated vividly that, SSNIT’s reserves will be emptied by the year 2036.
According to ILO, the aggregated income which includes investment income, contribution, and other sources of income, will no longer be adequate to service the annual expenditures such as pensioners monthly allowances.
“Starting in 2029, total income (contributions, investment income, and other income) is no longer sufficient to pay for annual expenditures.
“The reserve starts to decrease. During the year 2036, the reserve drops to zero.” The research asserted.
Clearly, with SSNIT not having any alternative sources of payment, they will have to rely solely on their reserves to service all payment demands, which serves as the beginning of the total depletion process, the ILO emphasized.
In addition, the e reserve ratio, calculated as the end-of-year divided by the annual expenditures, declines from 3.4 to 0 from 2021 to 2036.
Meanwhile, in SSNIT’s previous proceedings, the scheme operated as a Provident Fund, catering for retirees, disability, death and accident victims plus making provision for emigrant contributors.
