The latest report from the International Labour Organisation (ILO) paints a bleak picture for the Social Security and National Insurance Trust (SSNIT), projecting its reserves to be depleted by 2036.
According to the ILO report, troubles for SSNIT beneficiaries are anticipated to commence as early as 2029, as contributions, investment returns, and other revenue streams will gradually dwindle, proving inadequate to cover the Trust’s annual expenses.
The actuarial assessment outlined in the report reveals a significant rise in the pay-as-you-go (PAYG) rate, reaching 29.5 percent by 2095, indicating the contribution rate needed to sustain the scheme’s expenses in the absence of reserves.
This surge is primarily attributed to a demographic shift, with a growing number of pensioners compared to contributors.
Key findings from the ILO report include:
- Annual contributions fall short of covering yearly expenses, including benefits and administrative costs, throughout the projection period.
- Initially, investment income helps bolster reserves until 2028.
- However, from 2029 onwards, total revenue (including contributions, investment returns, and other sources) fails to meet annual expenditures, resulting in a decline in reserves.
- By 2036, the reserves are completely depleted.
- From 2036 onwards, the required annual contribution rate to cover all expenses matches the PAYG rate, starting at 12.4 percent and escalating to 29.5 percent by 2095.
- The reserve ratio, indicating the number of years expenses could be covered solely by reserves, drops from 3.4 to 0 between 2021 and 2036.
