SSC funds grow by N$1.3bn to nearly N$6bn in two years

The Social Security Commission’s (SSC’s) accumulated funds have grown by N$1.33 billion in two years to N$5.98 billion, as investment earnings surged and its annual surplus climbed to N$842.1 million.

The latest audited financial statements show accumulated funds rose from N$4.65 billion in February 2024 to N$5.17 billion in 2025 and N$5.98 billion at the end of February this year, representing growth of nearly 29%.

Compared with N$4.32 billion in 2023, SSC has added about N$1.66 billion to its accumulated funds in three years, while total assets rose 15% in the latest financial year from N$6.01 billion to N$6.91 billion.

Investment income emerged as a major driver of the latest growth, jumping 45% from N$600.1 million to N$872.3 million.

This was N$28.9 million more than the N$843.4 million recognised as insurance revenue from expected contribution receipts during the year. Of this amount, N$700.1 million related to the Maternity Leave, Sick Leave and Death Benefit Fund, while N$143.3 million related to the Employees’ Compensation Fund.

Strong investment performance pushed SSC’s annual surplus up 73% from N$487 million to N$842.1 million.

The increase is more pronounced than the N$328 million surplus reported in 2024, with the annual surplus growing by about 157% in two years.

Insurance service expenses rose from N$664.1 million to N$702.6 million, but the insurance service result more than doubled from N$63.7 million to N$140.8 million.

Operating expenses also declined from N$197 million to N$188.8 million despite higher revenue. This reduced operating expenditure relative to insurance revenue from about 27 cents for every N$1 in 2025 to 22 cents in 2026.

N$6.6bn invested

SSC’s investments and other financial assets increased by more than N$1 billion in one year, from N$5.61 billion to N$6.62 billion.

SSC held about N$5.51 billion through approved investment managers, including N$2.21 billion in listed equities and N$1.92 billion in bonds. Another N$719.3 million was held in cash, fixed-term deposits and other money-market instruments within the managed portfolio, while N$663.4 million was invested in unit trusts.

SSC separately held N$1.22 billion in fixed-term deposits, up from N$968.7 million the previous year.

Investments and other financial assets accounted for about 96% of SSC’s asset base, although cash and cash equivalents declined from N$130.7 million to N$97.6 million.

Total liabilities increased 11% from N$834 million to N$928.9 million, slower than the 15% growth in assets.

A significant increase came from SSC’s post-retirement medical obligation, which jumped 39% from N$159.5 million to N$221.6 million. The obligation is unfunded, meaning no separate pool of assets has been specifically set aside to meet it.

An actuarial remeasurement loss of N$35.4 million on defined-benefit obligations brought total comprehensive income to N$806.7 million.

SSC also recognised a N$64.7 million impairment after revaluing its land and buildings and finding that the fair value of some properties was below their carrying amounts.

Property, plant and equipment consequently declined from N$212.9 million to N$154.3 million, despite N$12.9 million in additions during the year.

The accounts further show that SSC’s N$10.5 million outstanding study-loan portfolio carried an equivalent loss allowance, leaving it with a net accounting value of zero.

A similar position was recorded in 2025, when N$10.75 million in study loans carried a matching loss allowance. The loans target students from low-income backgrounds and are repayable after completion of their studies, with repayment terms open to renegotiation and extension.

The full impairment does not necessarily mean the loans have been written off. It reflects expected credit losses recognised against the entire outstanding balance.

SSC’s investment with SME Bank also remains fully impaired because it is past maturity and its recoverability remains uncertain.

Bigger responsibilities ahead

The commissioners’ report says Cabinet selected SSC to take over the overall management and administration of the N$3.9 billion Public Service Employees Medical Aid Scheme (Psemas).

SSC has also been directed to implement the National Medical Benefit Fund, which is intended to provide healthcare coverage to workers and their families, including lower-income earners such as taxi drivers and vendors.

Both initiatives were still in their early stages during the reporting period, while the National Medical Benefit Fund and National Pension Fund had been established but were not yet operational.

Auditor-General Junias Kandjeke issued an unqualified audit opinion, finding that SSC’s financial statements fairly presented its financial position, performance and cash flows in all material respects.