THE state-run Social Security System (SSS) said on Friday that it would hire fund managers to better manage the pension fund assets.
Speaking on the sidelines of the agency’s 59th anniversary, its president and CEO, Emilio de Quiros Jr., said the pension fund is looking to hire at least three managers who will each manage P1-billion worth of assets.
“We are just waiting for the new commissioners to be appointed so our investment group will be making their presentation and recommendations,” he said referring to the yet to be appointed commissioners of the Social Security Commission (SSC), the governing body of SSS.
Once the SSC commissioners have been appointed, the fund managers could be in place soon after, possibly within this year.
He said SSS has a preference for local fund managers but will also try to look eventually at foreign managers.
A recent report showed that SSS booked an investment income of P28.65 billion in 2015 or 18.9 percent lower than the P34.53 investment income posted in 2014.
The pension fund’s return of investment for 2015, however, hit 6.9 percent, outpacing key market indicators such as the 10-year Treasury bond and 364-day T-bill rates which averaged 4.0 percent and 2.1 percent, respectively.
The executive vice president for SSS’ investments sector, Rizaldy Capulong, noted that the agency’s ROI last year also remained ahead of national economic indicators, particularly the 5.8 percent growth in gross domestic product (GDP) and 1.4 percent inflation rate for 2015.
According to SSS, from 2011 to 2015, the SSS annual ROI averaged 9.1 percent, outperforming the five-year annual averages of 5.9 percent for the gross domestic product growth, 4.8 percent for the 10-year T-bond, 3.3 percent for the inflation rate, and 1.8 percent for the 364-day T-bill.
Government securities, the largest contributor to SSS investment earnings at 38.6 percent, registered a 7.1 percent ROI and brought in P11.05 billion last year, improving on the P10.98 billion earned in 2014.
Combined income from government securities and equities make up two-thirds or P19.18 billion of the entire SSS investment earnings for 2015.
Equity investments have been generating good returns for the funds of SSS members, earning P8.13 billion last year while the ROI reached 8.2 percent despite the 3.9 percent Philippine Stock Exchange index decline in 2015.
SSS said equities accounted for 28.4 percent of its total investment income last year, and remain a major component in its investment strategies.
Earnings from salary loans amounted to P4.86 billion, higher than P4.79 billion the previous year, on the back of a 7.8 percent ROI.
Meanwhile, income from corporate notes and bonds rose from P1.03 billion in 2014 to P1.41 billion last year
with nearly a 5 percent ROI.
The P426.66-billion SSS investment portfolio is currently comprised of government securities (39.9 percent), equities (23.0 percent), salary loans (15.6 percent), corporate notes and bonds (8.0 percent), bank deposits (5.9 percent), real estate (4.7 percent), and housing and development loans (2.9 percent).
Real estate, while only about 5 percent of the SSS investment portfolio, contributed P2.2 billion or 7 percent of the total SSS investment income last year. Real estate also recorded the highest ROI among the different types of SSS investments in 2015, the agency said.