For a pensioner whose monthly income is barely enough to buy food, medicine and pay utility bills, inflation does not arrive once a year. Rent does not wait for January. The price of food does not wait for SSNIT’s annual indexation announcement. Medicines do not become cheaper because the next pension adjustment is still several months away. Yet Ghana’s pension system essentially asks pensioners to do just that: endure the economic circumstances of the year and wait for the next annual adjustment.

This is perhaps the most fundamental question pensioners are now asking: Why must pension adequacy be reviewed only once a year when the economic circumstances affecting pensioners can change dramatically within months? The question has become even more urgent following the economic shock of 2022–2024, when inflation reached 54.1% in December 2022. The subsequent decline in inflation has provided welcome relief to the economy, but it has not automatically restored the purchasing power lost by pensioners during the crisis. That is the distinction that Ghana’s pension debate must now confront.

Indexation is not the Same as Adequacy

SSNIT has a statutory obligation to review pensions annually. Section 80 of the National Pensions Act, 2008 (Act 766), provides the framework for the annual review. SSNIT’s own materials describe pensions as being reviewed annually based on changes in average wages and other economic indicators.

But there is a difference between reviewing a pension annually and protecting the purchasing power of a pension throughout the year. This distinction matters enormously.

Suppose a pensioner begins the year with a monthly pension of GH¢1,000. If food, transport, utilities and medicines rise sharply during the year, the pensioner’s real income falls even though the nominal pension remains unchanged. The pensioner cannot simply tell Ghana Water Company, the supermarket, pharmacy or ECG: “Please wait until SSNIT’s next indexation.” This is the fundamental weakness of a purely annual approach. The question Ghana should therefore be asking is whether annual indexation should remain the only mechanism for protecting pension purchasing power.

A more responsive system could retain annual indexation while introducing a mid-year review or stabilization mechanism when inflation or the cost of essential goods crosses a predetermined threshold. That would not mean automatically increasing pensions every time prices move. It would mean designing a rule for exceptional circumstances.

The 2022–2024 Lesson has not Disappeared

The economic crisis exposed the vulnerability of pensioners to inflation. The problem is not simply that SSNIT did not increase pensions enough. There is a deeper structural problem. In a partially funded defined-benefit scheme, pension increases must be balanced against contribution inflows, investment returns and the long-term actuarial sustainability of the Fund. That argument is legitimate. But sustainability cannot become a permanent justification for allowing pensioners to absorb every macroeconomic shock.

SSNIT’s own 2023 Annual Report provides an illuminating insight. Over the decade 2014–2023, the Trust recorded a geometric mean nominal investment return of 14.78%, but its real return over the same period was approximately -0.28%. The report itself acknowledged that high inflation had significantly eroded the real value of investment returns. This should change the nature of the public conversation.

The relevant question is not simply: How much money does SSNIT have? It is also: What is that money worth in real terms, and how effectively is it being converted into adequate retirement income?

Why the Bragging?
If SSNIT has money, pensioners want to see it in their pensions. SSNIT has been increasingly highlighting the strength of its investment portfolio, investment reforms and efforts to improve returns.

The Trust itself says its investment principles include yield, safety, liquidity, diversification, capital preservation and overall returns. It has also announced measures to improve the performance of its investments, including restructuring its portfolio and enhancing returns from its assets. That is encouraging. But pensioners are entitled to ask a simple question: When will these improvements become visible in the pensioner’s pocket?

If SSNIT has a stronger financial position, better investment returns, improved contribution compliance and a government that says it has cleared outstanding arrears to the Fund, then pensioners naturally expect the next phase to be reflected in pension adequacy. In June 2025, the Finance Minister announced that government had cleared its outstanding obligations to SSNIT; SSNIT subsequently said government contribution arrears had been brought to zero by the end of 2025.

This is why pensioners will be watching the next indexation announcement with particular interest. They are not asking SSNIT to bankrupt itself. They are asking: If the Fund is financially stronger, what better package can pensioners reasonably expect?

And What Happened to the Reform Agenda?

This is another question that deserves a clear answer. The pension difficulties exposed between 2023 and 2025 generated considerable discussion about pension reform: improving adequacy, reviewing the pension formula, addressing low pensions, strengthening investment performance and protecting vulnerable retirees.

But pensioners now want to know which of those proposals have actually moved from discussion to implementation. The 2025 Budget, for example, specifically referred to the need to address pensioners with low monthly pensions and proposed collaboration among the Controller and Accountant-General’s Department, SSNIT and NPRA to revise the minimum pension allowance payable to retired security-agency officers. That is useful, but it does not answer the broader question of minimum pension adequacy across the SSNIT system.

Where is the comprehensive reform that addresses the pension floor, inflation protection and the erosion of purchasing power? Where is the mechanism for extraordinary inflation? Where is the framework for a living minimum pension? And where is the reform that ensures that pensioners are not simply waiting another twelve months for relief? These questions should not be dismissed as impatience. They are questions about the design of the pension system itself.

Why is the Minimum Pension below the Minimum Wage?

Perhaps nowhere is the adequacy problem more obvious than in the relationship between Ghana’s minimum wage and minimum pension. For 2026, the national daily minimum wage is GH¢21.77. On a 30-day basis, that is approximately GH¢653.10.

SSNIT’s 2026 minimum pension for new pensioners was set at GH¢400, while some existing pensioners previously on the GH¢300 minimum were to receive GH¢409.56 after indexation and redistribution. The uncomfortable question is therefore unavoidable: Why should a person who has spent a working life contributing to a national pension scheme retire to an income substantially below the minimum wage?

The minimum wage represents what the state considers the minimum acceptable remuneration for a worker’s labour. Should the minimum pension not at least provide a comparable minimum income floor for someone who has completed his or her working life?

Of course, the two concepts are not identical. A minimum wage is remuneration for current labour; a contributory pension is a benefit based on past contributions and an individual’s earned pension right. SSNIT’s pension formula takes account of age, the average of the best 36 months’ salary and contribution history, with pension rights ranging from 37.5% to 60% under Act 766. But that distinction does not resolve the adequacy question. A pension system may be actuarially correct and still produce an inadequate social outcome.

Ghana therefore needs to consider whether there should be a national minimum living pension, just as it has a national minimum wage.

Annual Indexation Needs a Second Layer

The answer may not be to abandon annual indexation. Annual indexation remains important and should continue. But Ghana could introduce a second layer: a Pension Stabilization Mechanism. If inflation or the price of a defined basket of essential goods rises beyond a specified threshold, a mid-year adjustment could be triggered.

The mechanism could be financed through a dedicated reserve, carefully structured fiscal transfers or a portion of non-debt natural-resource revenues during exceptional periods. Such a mechanism would recognize an important reality: pensioners cannot be expected to carry a macroeconomic shock for twelve months simply because the law schedules a review once a year.

SSNIT Also Needs to Think Beyond Government Paper

The recent economic crisis demonstrated the importance of diversification. SSNIT’s own investment philosophy recognizes diversification as one of the principles of investment management. The Trust should therefore continue to examine productive infrastructure, real estate, energy, agriculture, private-sector investments and carefully regulated international assets. The objective should not simply be to make more money. It should be to produce sustainable real returns that match the Fund’s long-term liabilities.

That is where the ideas of Modern Portfolio Theory, the Fisher effect and asset-liability management become relevant. A nominal return that loses purchasing power to inflation is not necessarily a successful pension investment.

Pensioner Advocacy Must Now Become More Sophisticated

Pensioners should continue to make their voices heard. Demonstrations have their place. But the next stage of pension advocacy should be more analytical. Pensioner organizations should demand independent actuarial assessments, publication of real investment returns, clearer disclosure of asset allocation, regular assessment of pension adequacy and a transparent explanation of how annual indexation is determined.

They should also demand answers from Parliament and government about the reform proposals discussed between 2023 and 2025. Most importantly, pensioners should not wait until January before asking these questions. The debate over the next indexation should begin now.

My Thoughts: What Should Pensioners Expect from the Next Indexation?

In January 2026, SSNIT applied an overall 10% indexation, comprising a 6% fixed rate and a flat GH¢91.56 component designed to redistribute more of the increase towards lower-paid pensioners. That redistributive principle is welcome. But redistribution from an inadequate base cannot by itself solve pension poverty.

The next indexation therefore presents an opportunity. Pensioners should expect more than another impressive percentage. They should expect SSNIT to demonstrate:

1. What happened to the purchasing power lost during 2022–2024?
2. What reforms have been implemented since 2023?
3. What is the real return on SSNIT’s investments?
4. What is the actuarially sustainable minimum living pension?
5. Why should the minimum pension remain below the national minimum wage?
6. What happens to a pensioner’s purchasing power if prices rise sharply six months after indexation?
7. And, finally: If SSNIT has the money and is improving its investment performance, is it now ready to give pensioners a better package?

These are not unreasonable questions. Ghana’s pension debate must move beyond the annual celebration of a percentage increase. A pensioner does not live on percentages. A pensioner lives on cedis — and those cedis must buy food, medicine, shelter, transport and dignity.

The ultimate test of SSNIT is therefore not how loudly it can announce its assets, investment achievements or annual indexation rate. The real test is whether a Ghanaian who spent a lifetime contributing to the pension system can retire without becoming poor. And that is why pensioners are asking: must we really wait another whole year before the system responds when our purchasing power collapses?

FUSEINI ABDULAI BRAIMAH
+233208282575 / +233550558008
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