The Social Security and National Insurance Trust (SSNIT) in Ghana faces a looming financial crisis, with its reserves projected to dry up by 2036, according to a recent report by the International Labour Organisation.

Initially functioning as a Provident Fund, SSNIT expanded its services to include accident, old age, disability, and death coverage, becoming a vital support system for emigration. 

However, since its transformation into a Social Insurance Pension Scheme governed by the PNDC law 247 in 1991, SSNIT has grappled with increasing administrative expenses, which now threaten the sustainability of the scheme.

Despite serving 1.6 million Ghanaians, roughly 16% of the country's workforce, SSNIT struggles with rising operational costs, diverting resources from beneficiaries. 

The report reveals that from 2008 to 2020, the scheme's average return on assets was a mere 0.9% after adjusting for inflation, contrasting starkly with the 17.5% average return on Ghana's 91-Day Treasury Bills over the same period.

Actuarial projections paint a grim picture, indicating that an increase in contribution rates is imperative for the scheme's longevity. 

The PAYG rate, representing the contribution needed to cover all scheme expenditures, is expected to rise from 11.5% in 2020 to 29.5% by 2095, further straining future generations.

Notably, the report highlights that annual contributions alone will not suffice to cover expenditures, necessitating the use of investment income until 2028. 

However, by 2029, the scheme will face a deficit, depleting reserves entirely by 2036. 

This dire situation underscores the urgent need for government intervention, with the International Labour Organisation recommending increased government contributions to mitigate the risk of reserve depletion.

In summary, SSNIT's financial woes require immediate action to safeguard the welfare of retirees and ensure the scheme's sustainability for future generations.