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How to calculate SSNIT pension

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NB: The percentage of your basic pay that comes to SSNIT is 11%. SSNIT pays between 37.5% to 60% as your starting pension, subject to yearly increment (indexation).

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There are three factors that determine your monthly pension.

1. Average of Best Three Years’ Salaries

Eg.

(a) 1st Best Year – Ghc50,000

(b) 2nd Best Year – Ghc45,000

(c) 3rd Best Year – Ghc30,000

Add all the figures and divide (➗) by 3. The answer (GHC41,666) becomes your Average Best Three Years’ Salary.

X

2. Pension Right

Pension Right means the number of months or years contributed.

The moment you contribute for 15yrs, you earn a Pension Right of 37.5% from a maximum of 60%.

Then every additional year gives you a Pension Right of 1.125%.

Eg. For someone who contributed for 20yrs, the first 15yrs will be 37.5%. The remaining 5 years will be 1.125 X 5 = 5.625.

So, 20yrs Pension Right: 37.5 % + 5.625% = 43.125%.

X

3. Age Reduction Factor

When you retire at age 60, you earn Full Pension, that is 100% or 1.

However, when you retire before age 60, depending on the age at retirement, that is 55 to 59yrs, you earn a Reduced Pension.

Instead of 100% benefit, your benefit will have this range (60% to 90%).

So, the formula will be:

GHC41,666

X

37.5% (if contribution period is 15 yrs)

X

1 (if the person retires at age 60).

The answer you get (GHC15,624.75) is the annual pension.

Kindly divide the answer by 12 to get the monthly pension (GHC1,302.0625).

NB:

1. The person contributed for 15yrs. If he had contributed for 20yrs, his monthly pension will be Gh1,497.37

2. This amount is subject to yearly increment.

3. The amount you earn as monthly pension is a reflection of your basic pay during active service.

4. This person contributed for 15 / 20yrs. But SSNIT pays monthly pension for LIFE.

5. There are people over 90yrs and still receiving monthly pension from SSNIT.

6. The SSNIT Scheme has a guaranteed period of 15 yrs (that is 60 to 75yrs). After 75yrs, you’ve exhausted all your money.

7. So, to ensure continuous payment of your monthly pension after 75yrs, you ought to renew your Pensioner Certificate every year.

8. Allowances are not included in the computation of pension. Employees are encouraged to discuss with their employers to consolidate their earnings and pay contribution on the total amount.

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