• SSS clarifies Danao, Ongpin and Perez columns

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    Please allow us to clarify the issues that were raised in the following articles that were published by The Manila Times.

    In “No nobility in cold-bloodedness” that appeared on January 20, columnist Efren Danao alleged that SSS used a wrong basis in computing for future contributions and further questioned the Fund’s projected life of 2029 once the proposed increase in SSS pensions is implemented.

    For his and everyone’s information, the figures that we reported to the public about the impact of the P2000 pension increase are backed by actuarial calculations, which means that long-term data such as demographic and economic assumptions, as well as estimated future liabilities are considered.

    Contrary to what he claims, the projected fund life of 2029 already constituted future contributions of expected number of new entrants, otherwise, SSS fund life would even be shorter with SSS’ current membership as basis.

    Also we would like to stress that even if SSS is consistently reaping positive revenues for the past several years, our assessment showed that historically, SSS’ P33-billion in average earnings will only be wiped out considering the total cash needs of P56 billion for the first year of implementation of the increase. Consequently, SSS will be forced to divest, sell its assets and dip into its reserve funds to meet its benefit obligations in the succeeding years. Our actuarial assessment revealed that SSS reserve funds will be depleted by 2029 if the agency will only source the payments from SSS members’ contributions and investment earnings alone to sustain the additional amount resulting from the proposed increase.

    We would like to correct Ma. Isabel Ongpin’s impression about the SSS that it has not engaged with legislators to “present its side or come up with a compromise,” as cited in her article “The SSS mess” on January 22, 2016.

    SSS has dealt with the issue as early as 2014, when the original measure of a P1,000 across-the-board increase in pensions was filed in the House of Representatives (HoR). SSS was asked to come up with a position statement, which it later submitted and presented during congressional deliberations last year. In June 2015, the proposed P1,000 in additional pensions was increased to P2,000 then adopted as House Bill 5842 in a matter of eight days without soliciting our comments.

    The bill was also passed and transmitted to Senate without giving us an opportunity to present our actuarial study on the impact of the P2,000 pension increase despite our request to members of the HoR. It is not true that SSS did not make any effort to make a compromise. In fact, we told legislators about how we can implement the increase in ways that will not put the viability of SSS funds at risk. We also raised our concern over the bill’s lack of provision for a definite source of funding.

    With regard to SSS officials’ bonuses, we would like to reiterate that based on what the law provides, none of it is excessive. Incentives in government are all performance-based and in the case of Government-Owned-And-Controlled Corporations like the SSS, the agency’s performance is constantly being monitored and reviewed by the Government Commission for GOCCs or GCG.

    In answer to Emeterio Sd. Perez’s article on January 22 titled, “Laguesma turns over director’s fees to SSS treasury,” our investment activities follow the basic principles of safety, liquidity and yield as required by the SSS Charter – and not by how much we can invest so we can have representations on boards of companies.

    SSS investments are scattered in diverse legal instruments from which it can yield highest returns. Moreover, SSS’ decision to hold a significant amount of equity in various blue-chip companies is part of our investment strategies in line with the above investment principles. Aside from equities, SSS can also place its investible funds at prescribed allowable rates in corporate bonds and notes, development loans, government securities, housing loans, bank deposits, and real estate properties.

    Thank you for the opportunity to make clarifications.

    Marissu G. Bugante
    Vice President
    SSS Public Affairs and Special Events Division

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    1 Comment

    1. As an aside to this issue, the present tenant of Malacanang said he vetoed the bill for the benefit of the 30 million members as against the 2 million or so pensioners. I would forward the opinion that the present level of assets of the SSS are due to the 2 million retirees and those soon to join them, probably another million members and that the contributions of the remaining 25 plus million members only contributed half or less to the fund.
      Makes sense to me.