Kwasi Afreh Biney, Director-General of the Social Security and National Insurance Trust (SSNIT), has cautioned against raising Ghana’s retirement age without extensive national agreement. He insists that such a significant decision requires broad societal consultation, not a unilateral move by any single institution.
Mr. Afreh Bineey’s statements came during an interview on Joy News’ PM Express Business Edition. He acknowledged that shifting demographic trends, including longer life expectancies, strengthen arguments for extending the retirement age beyond the current threshold of 60 years. While many retirees actively continue working, he noted the far-reaching implications of such a change.
Ghana's pension system, like many globally, faces pressures from an aging population. Data from the Ghana Statistical Service indicates a continuous increase in life expectancy over recent decades, challenging existing social security frameworks. The current discussion on retirement age fits into wider national debates on economic sustainability and job creation, especially for younger generations.
Mr. Afreh Biney stressed the importance of balancing pension scheme sustainability against job availability for Ghana's youth. He stated, “A decision to extend retirement goes beyond just that. You need to consider factors like your employment rate, unemployment numbers, availability of jobs.” This highlights the complex interplay between different segments of the labour market and economic planning.
Extending the retirement age would have direct financial consequences for the SSNIT pension scheme. Mr. Afreh Biney explained that a longer working period, such as extending retirement from 60 to 65, means less immediate payouts from SSNIT and more incoming contributions. This could improve the financial health of the pension fund, potentially ensuring its ability to pay benefits for a longer period, currently projected at 40 years.
However, he questioned the broader economic impact, particularly on youth employment. “How do we just oppose that against probably creating another backlog of five, seven years on unemployed youth who could have come into the employment bracket?” he asked. This concern is particularly pertinent in Ghana, where youth unemployment remains a significant challenge, impacting social stability and economic growth.
Policymakers must conduct a thorough assessment of both the benefits and costs of any retirement age reforms. This includes evaluating the opportunity cost—the potential loss of other benefits when one option is chosen over another. A national dialogue involving all stakeholders will be crucial for a comprehensive decision, ensuring long-term economic stability and social equity.
The call for national consensus implies that the government, labour unions, employers, and civil society organizations will need to engage in extensive discussions. Any reform will likely be phased or accompanied by other labour market policies to mitigate negative impacts on younger workers.