Primarily, as a result of the partial funding design adopted by the SSNIT Scheme, the Trust is able to accumulate huge reserves which are invested to generate income to augment the contributions of members. The investment policy guidelines seek to achieve safety, high yield, diversifiction and liquidity.
Nevertheless, in line with its social responsibilities, the Trust also undertakes socially oriented investments in sectors such as health, education, housing and the provision of basic infrastructure. The Trust remains the largest single institutional investor on the Ghana Stock Exchange that is helping to nurture the development and sustenance of the Capital Market in Ghana.
The Trust has shares in a number of listed companies on the stock market. In addition, the Trust has investments in unlisted equities, commercial and residential properties all over the country.
General Principles for the Investment of Social Security Funds
The basic principles which govern the investment of social security funds are the same as those of other financial institutions, namely
In addition to the basic conditions, the investment of social security funds are guided by the fourth principle of social and economic utility.
This is a very important condition with regard to the investment of social security funds. SSNIT has been entrusted with other people?s property. As a result, very strict rules have to be observed as regards the safety and control of the investments. Safety must be looked at as a two-dimensional condition- "Nominal" safety and "Real" safety.
SSNIT must ensure that the nominal value of the invested capital is recovered and that regular payment of interest must be ensured. This will however, not be sufficient if the value of money has depreciated. Investment managers must therefore, also seek Real safety of the investments, that is, they must try and maintain the real value of the invested amounts as well as their yields.
The yield of interest on investments is also important, especially the yield on the investment of the long-term reserves. The investment of the long-term reserves must earn interest, at least at the technical rate of interest otherwise the scheme will face an actuarial deficit.
For the investment of the contingency reserve, it is however, not necessary to seek investments with highest yield because the principal objective for the placement of these funds is liquidity.
The contingency reserves for short-term needs should be placed in liquid investments which are easily convertible into cash. On the other hand, the long-term reserves for the payment of future pensions which are primarily intended to earn interest, do not require a high degree of liquidity.
Economic and Social Utility
After satisfying the conditions of safety, yield, and liquidity, the economic and social utility of the investments must be taken into account in the investment policy. It is in the interest of SSNIT that funds are invested in such a way that they contribute to the improvement of the health, education, and the standard of living of the people, as well as the creation of employment.
Harmony with Public Interest
In a country like Ghana where there is scarcity of capital, it is important for SSNIT's investible funds to be placed at the disposal of the National Economy, with due regard for the requirements of safety, yield and liquidity. It must however, be stressed that in contributing to National Economic development, the funds should not be used as a means of obtaining money for the government to finance deficits.
In the development of the policy guidelines, the major objectives are
- To maintain a long-term optimum fund ratio through realization of real returns on investment.
- Maintain a portfolio mix which ensures low risk on investments
- Ensure adequate liquidity to enable the Trust meet its obligation when due.
Under Act 766, the Investment Policy has to be reviewed when necessary in line with guidelines issued by the National Pensions Regulatory Authority in consultation with the Board of Trustees.
The Trust's investment portfolio is grouped as follows
- Term Loans
- Students Loan
- Real Estate
- Private Equity
- Economically Targeted Investments
It should be noted that, in terms of equity investments, the Trust has been a major player on the Ghana Stock Exchange. As at December 2009, the Trust had invested in 63% of the listed companies. Apart from these, the Trust had invested in 39 unlisted companies in the
Financial, Manufacturing and Services Sectors of the economy.
SSNIT has put up health centers in Amasaman (Greater Accra Region), Larteh (Eastern Region), Akatsi (Volta Region), Anyan Abasa (Central Region), Sefwi Wiawso (Western Region), Dominase (Ashanti Region). These health centers after they had been built were donated to the community for either the Ministry of Health or other Health institutions to operate at a small fee. The schools built are found within the workers flats or Townships built by SSNIT and mostly in Sakumono, Adenta, Ashongman and Asuoyeboah.