Changes to ‘conservative’ SSS law urged

The chair of the Social Security Commission (SSC) is pushing for the amendment of the Social Security System (SSS) charter to allow the pension fund to raise more revenues.

In a statement Monday, SSC chair Amado D. Valdez lamented that the SSS’s investment capabilities, as provided under the Social Security Act of 1997, “are limited amid current market trends.” The SSC is the body overseeing SSS operations.

He said amendments were already needed to replace the conservative provisions of the SSS charter.

The almost two-decade-old charter limits the SSC’s power to invest its reserve fund in foreign currency-denominated investments, government financial institutions and corporations, housing, infrastructure projects, private securities, real estate, short- and medium-term member loans.

Last week, Valdez said he wanted to pool funds from members for investing in public-private partnership (PPP) projects, in particular tollways, which the SSC chair said would generate a “lifetime income.”

“In the past, SSS invested in the South Luzon Tollways through corporate bonds which generated a yield of close to 7 percent. This time, we want to explore the possibility of funding projects for new tollways, income of which is for a lifetime. We plan to invest 25-30 percent of our reserve fund in these road development projects and we expect the same rate of return, if not better,” Valdez said.

“SSS seeks to include new investment vehicles where SSS can invest its reserve fund without compromising the basic investment principles of safety, good yield and liquidity. We hope that this legislation will be passed immediately to help us in our pursuit to increase the income of the agency and enhance the benefits for our members,” he added.

Valdez earlier told Congress the SSS may implement the proposed P2,000 across-the-board pension hike in two tranches—a P1,000 increase next year, to be followed by the remaining half by 2022 or earlier.

“This is the best option for SSS so as not to exhaust its fund,” Valdez said.