Top 5 Simple Steps to Calculate SSNIT Worker’s Death Survivors’ Benefit in 2023

    Top 5 Simple Steps to calculate SSNIT Worker's Death Survivors’ Benefit in 2023

    Ferdinand | EducationGhana | April 13|Top 5 Simple Steps to Calculate SSNIT Worker’s Death Survivors’ Benefit in 2023

    The Social Security and National Insurance Trust (SSNIT) is a statutory public Trust charged under the National Pensions Act, 2008 Act 766 with the administration of Ghana’s Basic National Social Security Scheme.

    Its mandate is to cater for the First Tier of the Three-Tier Pension Scheme. The Trust is currently the largest non-bank financial institution in Ghana.

    The primary responsibility of the Trust is to replace part of the lost income of workers in Ghana due to Old Age, Invalidity or Death of a member where dependants receive lump sum payment.

    It is also responsible for the payment of Emigration benefits to a non-Ghanaian member who is leaving Ghana permanently.

    The Pension Scheme as administered by SSNIT has an active membership of over 1.6 million as of January 2021 with over 226,000 pensioners who regularly receive their monthly pensions from SSNIT.

     

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    How are the Survivors’ Benefits calculated?

    The Survivors’ benefits are computed as follows:

    A. Worker Death Survivors’ Benefit

    The Survivors’ benefit (i.e. the lump sum benefit) is the present value of the member’s pension for a period of 144 months under PNDCL 247 and 180 months under Act 766, using the prevailing Treasury bill rate or ten per cent, whichever is the lower.

    Procedure for Computing Worker Death Survivors’ Benefit

    Follow the five-step procedure to calculate the Worker Death Survivors’ Benefit

    STEP 1: Compute the Pension Right

    Under PNDCL 247

    1. Where the member has contributed for a period of not less than 240 months prior to
      death, the member shall be entitled to a pension right equivalent to that of the Old-age
      retirement pension.

    PENSION RIGHT = 0.50 + [Total number of months of contributions – 240] x 0.00125

    1. Where the member fails to satisfy the minimum contribution period of 240 months the
      member shall be given a pension right of 50% or 0.50 (i.e. the minimum pension right).

     

    Under Act 766

    1. Where the deceased has contributed for a period of not less than 180 months, the
      member shall be entitled to a pension right (or pension credit) equivalent to that of the
      Old-age retirement pension.

    PENSION RIGHT = 0.375 + [Total number of months of contributions – 180] x 0.0009375

    Where the deceased fails to satisfy the minimum contribution period of 180 months the
    member shall be given a pension right of 37.5% or 0.375 (i.e. the minimum pension right).

    Note: In all the cases, it is assumed that the member has already contributed for at
    least 12 months within the last 36 months prior to death.

     

    STEP 2: Determine the average of three best years’ annual salary

    To determine the average of your three best years’ annual salaries:

    (i) Select the three best years’ annual salaries from your SSNIT statement of account

    [Salary1]: The highest annual salary
    [Salary2]: The second-highest annual salary
    [Salary3]: The third highest annual salary

    (ii) Calculate the average of the three (3) best years’ annual salaries using the formula

    Average of three best years annual salaries = Salary 1+Salary 2+ Salary 3/ 3

    STEP 3: Compute the annual Pension

    Multiply the Average of the three best years’ annual salaries by the Pension Right to obtain the Annual Pension.

    Annual Pension = Average of three best years’ annual salaries X Pension Right

    Divide the Annual Pension by 12 to obtain the Monthly Pension.

    Monthly Pension = Annual Pension/12

     

    STEP 5: Compute the Survivors’ Benefit

    Under PNDCL 247

    Compute the present value of the member’s pension for a period of twelve years (or 144
    months), using the prevailing Treasury bill rate or 10% whichever is the lower as the discount rate.

    Survivors’ Benefit = Annuity Factor X Monthly Pension

    Top 5 Simple Steps to Calculate SSNIT Worker's Death Survivors’ Benefit in 2023 | 1

     

    Under Act 766

    Compute the present value of the member’s pension for a period of fifteen years (or 180
    months), using the prevailing Treasury bill rate or 10% whichever is the lower as the discount rate.

     

    Top 5 Simple Steps to Calculate SSNIT Worker's Death Survivors’ Benefit in 2023 | 2

     

    You can also apply for the Survivors Benefit HERE

     

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    Top 5 Simple Steps to Calculate SSNIT Worker's Death Survivors’ Benefit in 2023 | 3UEW NEW ACADEMIC PROGRAMMES


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