The Social Security and National Insurance Trust (SSNIT) is restructuring its investment portfolio to focus on turning around non-performing assets and expanding exposure to fixed income securities to ensure predictable returns and safeguard pension payments.
Director-General of SSNIT, Kwesi Afreh Biney, said this move aligns with the fund’s maturity phase, wherein rising pension obligations require more stable and reliable income flows.
“Gone are the days when our payout was around 20 per cent, possibly in 1991 or even 1998.
“Today, our payout ratio is 86 per cent – meaning that for every ten cedis that come in, 8.6 goes to pay pensions,” he said during a media engagement.
He explained that with such a high payout ratio, SSNIT must rebalance its portfolio for greater predictability. The strategy involves unwinding from underperforming unlisted investments and channelling released liquidity into the fixed-income market, in line with policy guidance from the National Pensions Regulatory Authority.
Afreh Biney said the fixed income market offers stability that allows the Trust to better plan and manage cash flows.
“When you have a scenario like that, you want some predictability so it will guide you and help you plan better. That’s the strategy,” he said.
Despite the shift, SSNIT will continue to invest in profitable listed equities. The Director-General noted that out of the GH¢4 Billion in growth in the fund’s portfolio this year, GH¢2 billion came from investments linked to the Ghana Stock Exchange.
“For performing companies, we will continue to increase our stake,” he said, citing firms such as CalBank, Standard Chartered and Ecobank as examples of potential reinvestment opportunities.
However, Afreh Biney acknowledged that some of the Trust’s unlisted investments remain non-performing, which necessitates the ongoing portfolio cleanup.
“While we are conscious of the performance of the good ones on the stock exchange, for those which are not doing well, we are looking to unwind and reallocate those resources to areas that deliver value,” he said.
He added that the new management is focused on improving governance and enforcing accountability across SSNIT’s subsidiaries. All board members appointed to subsidiaries are required to sign undated resignation letters to ensure they can be removed if they fail to meet performance expectations.
“We need to protect the worker whose money we hold in high respect and trust,” Afreh Biney said.
The Trust also intends to exercise its shareholder rights more assertively in companies where it holds significant equity stakes.
“Once we hold at least 26 per cent, we have blocking rights and we will not hesitate to activate those rights if necessary,” he said, stressing that SSNIT’s oversight role will be strengthened to prevent mismanagement.
Afreh Biney, who has a background in retail, corporate and transaction banking, said digitalisation will play a critical role in driving operational efficiency and improving returns.
“To improve the cost to sell, we’ve got to go digital. Beyond the speed digital gives us, it helps reduce cost – and the more we reduce cost, the higher our indexation will be,” he said.
He assured contributors that SSNIT’s investments remain in “good hands” and the Trust is committed to improving returns, expanding coverage and enhancing convenience for contributors.
“We’ll make sure we improve the returns of investment, expand coverage, improve convenience and make all of you proud,” he said.
Discussion about this post