SSNIT reserves projected to hit zero, deplete in 12 years – ILO

By 2036, the International Labour Organization (ILO) projects that SSNIT ‘s reserves would completely deplete.

An actuarial valuation examination of the viability of the Social Security and National Insurance Trusts (SSNIT) disclosed this.

The ILO projects that by 2029, overall revenue, including contributions, investment income, and other income, will not be enough to cover yearly expenses, such as retiree benefit payments.

“The reserve begins to shrink in 2029 when overall income (contributions, investment income, and other income) is no longer sufficient to cover annual expenses.

The analysis emphasized that the reserve falls to zero in 2036.

When SSNIT runs out of other ways to pay, it will rely on its reserves to cover the demand, which will cause the depletion process to begin.

This is probably going to go on until 2036, at which point, according to the value study, the reserve will zero out.

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Between 2021 and 2036, the reserve ratio—which is the end-of-year reserve divided by the annual expenditures for the year—moves from 3.4 to 0.

This means that in the event of no contributions, no investment income, and no other revenue, the system will no longer be able to pay pension payments.

The valuation report’s specifics revealed that the government’s payment delay is the main factor contributing to this development.

The analysis highlighted that this results in a 1.3% decrease in the projected returns on investment made by SSNIT.”

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Previous experience suggests that the Government shifts an important part of the cost to the private sector by not paying on time and not paying the interest income on delayed contributions,” the paper states.

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