The Social Security and National Insurance Trust (SSNIT) has announced a review of the maximum insurable earnings for Ghana’s public pension scheme, increasing the ceiling from GH¢52,000 to GH¢69,000 effective 2026.
The adjustment is in line with Section 63 of the National Pensions Act, 2008 (Act 766), which mandates SSNIT to periodically review the maximum salary level on which pension contributions are calculated. Section 66 of the same Act further provides for regular reviews to reflect prevailing economic and labour market conditions.
According to SSNIT, the new cap follows “a detailed actuarial and economic assessment,” including an analysis of salary distributions among active contributors, inflation trends, interest rates, and the long-term impact of pension indexation. “The objective is to maintain the financial sustainability of the scheme while ensuring fairness to contributors,” the Trust said.
Why the salary cap matters
Under the SSNIT scheme, a member’s initial pension benefit is largely earnings-related and is calculated using the average of the contributor’s best three years’ salaries. Pension analysts say this makes the setting of a maximum insurable earnings threshold a critical policy tool.
“An effective salary capping policy protects the scheme from salary inflation risk,” SSNIT officials explained. “Uncontrolled salary inflation can seriously undermine the financial integrity of a defined benefit pension scheme.”
Industry observers note that the absence of a salary cap under the former PNDC Law 247 contributed to disproportionately high pensions for some retirees. “There was no salary capping policy under PNDC Law 247, and many of the highest pensions today can be traced to retirees who exited the system under that regime,” a pension policy expert noted.
Historical adjustments
Since the introduction of Act 766, the maximum insurable earnings have been revised several times. When the law was implemented, the cap was set at GH¢20,000 and maintained from 2011 to 2016. It was later increased to GH¢25,000 between 2017 and 2020, adjusted to GH¢35,000 for 2021–2022, and then raised to GH¢42,000 in 2023. For 2024 and 2025, the ceiling stood at GH¢52,000 before the latest upward revision to GH¢69,000 for 2026.
Concerns over excess contributions
Despite the increase, pension researchers warn that significant policy challenges remain. One key concern is the growing number of contributors whose salaries exceed the maximum insurable earnings.
“The number of workers earning above the cap runs into several thousands,” said Abdellah Mashud, Executive Director of the African Centre for Retirement Research (ACRR). “Regulations require that contributions on earnings above the SSNIT cap should be credited to the worker’s Tier Two account, but our assessments show that this is often not being done.”
Mashud cautioned that failure to credit these excess contributions “reduces the net retirement benefits of affected workers and undermines confidence in the pension system.”
Call for legal clarity
Pension experts are now calling for clearer legal guidance on how maximum insurable earnings are determined. Mashud suggested that future pension reforms should explicitly spell out the methodology and formula for setting the cap.
“Embedding the method in law would align Ghana’s pension system with international best practices, including the International Labour Organization’s Convention 102,” he said. “It would also improve transparency and accountability among all stakeholders.”
As discussions on the next phase of pension reforms gather momentum, the latest SSNIT adjustment is expected to reignite debate on equity, sustainability, and governance within Ghana’s pension system.
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