Ignatius Baffour Awuah
Minister of Employment and Labour Relations, Ignatius Baffour Awuah, is scheduled to meet with stakeholders in the pension industry to discuss the refund of unpaid 4% Tier 2 contributions to the Social Security and National Insurance Trust (SSNIT).
Dr. Ofori-Tenkorang, Director-General of SSNIT, who disclosed this, said the discussion is expected to begin this month (February).
Answering questions before the Public Accounts Committee (PAC) of Parliament yesterday, the SSNIT boss stated that the Trust was making all efforts in recovering the outstanding funds owed to SSNIT.
The 2022 Auditor-General’s report noted SSNIT’s inability to fully recuperate the 4% contributions from Tier 2 Fund Managers.
Following the passage of the National Pension Act of 2008 (Act 766), these fund managers were given the responsibility of managing the funds on behalf of contributors.
With the passage of the National Pensions Amendment Act of 2014 (Act 883), 105,124 contributors from the public and private sectors had already contributed to SSNIT.
These contributors, whose 4% contributions were managed by private fund managers, are now retired and receiving full retirement benefits from SSNIT.
As of January 2021, the fund managers owed SSNIT GH¢483,365,156.60.
SSNIT got only GH¢6,076,705.05 in 2021, leaving GH¢477,288,451.55 to be collected from fund managers.
According to the Auditor-General’s report, 10 of the Trust’s sampled subsidiaries appointed their own auditors to audit their financial statements, which is contradictory to Article 187 of the 1992 Constitution and Regulation 204 of the Public Financial Management Regulations, 2019 (L.I. 2378).
Dr. Ofori-Tenkorang, in response, explained that the Trust’s subsidiaries are independent limited liability companies under the Companies Act, 2019 (Act 992), with the authority to appoint auditors.
“Pursuant to the Companies Act, it is the Board of Directors of the company that has the mandate to appoint auditors on behalf of the shareholders.
“We have communicated this legal opinion in writing to the Auditor-General and we are waiting for a formal response,” he stated.
However, the Auditor-General disagreed with the SSNIT boss’ perspective, forcing the Committee’s Chairman, James Klutse Avedzi, to intervene and address the issue.
He explained, “The Auditor-General audits the public accounts of Ghana and the same Auditor-General audits the accounts of Public Boards, Corporations and other Statutory Institutions. So, per that provision in the Constitution, the Auditor-General audits the accounts of SSNIT.”
“Now, SSNIT owns a company, which is a limited liability company governed by the Companies Act. So directly, the Auditor-General cannot audit that private company. So whatever decision is taken [by the company], it’s incorporated into SSNIT’s account which is audited by the Auditor-General.
“So, there is no need for the Auditor-General to audit the subsidiaries,” Mr. Adedzi added.
On the advance payments of 15% contract sum threshold as stipulated in the Public Financial Management Regulations, 2019 (L.I. 2378), the Trust accepted the recommendations of the Auditor General.
Kofi Bosompem Osafo-Maafo, SSNIT’s Deputy Director-General in Charge of Investment and Development, stated that management has implemented measures to ensure the subsequent payments do not exceed 15% of the contract sum threshold.
When the Committee Chairman asked the auditors if they were satisfied with the response from SSNIT, the Auditor-General’s officials replied that they definitely were.
By Ernest Kofi Adu