The SSS main office on East Avenue in Quezon City
Published: 7:16 p.m., Nov. 1, 2017 | Updated: 11:41 p.m., Nov. 1, 2017
An official of the Social Security System (SSS) resigned on Wednesday amid a complaint lodged against him and other key members of the investment unit of the state-administered pension fund for workers in the private sector.
The equities investment division chief, Reginald G. Candelaria, resigned “but without prejudice to the investigation and subject to clearances,” SSS Chair Amado Valdez said in a text message to the Inquirer late on Wednesday afternoon.
Valdez said chief actuary George Ongkeko Jr. also tendered his resignation, but its acceptance was “deferred until December” pending the completion of his advisory work.
Earlier, the SSS chair said four officials, including Candelaria and Ongkeko, had been placed on “floating status” amid allegations that they improperly made money from buying and selling stocks for their personal accounts using brokers handling the pension fund’s equity investments.
The two others are executive vice president for investments Rizaldy T. Capulong and equities product development head Ernesto D. Francisco Jr.
The SSS move came after the Associated Labor Unions-Trade Union Congress of the Philippines called for the suspension of the officers to safeguard documents and to prevent them from influencing an internal investigation.
READ: Campos wants NBI, Ombudsman to conduct parallel probe on SSS fiasco
Relieved of duties
Valdez said Capulong, Candelaria, Francisco and Ongkeko were temporarily relieved of their duties pending the results of an investigation of their investments in shares of stock.
“They were assigned to the office of the president on floating status,” he said in a text message to the Inquirer. He later confirmed that Candelaria and Ongkeko had resigned.
Earlier this week, SSS Commissioner Jose Gabriel La Viña accused the four officials of “serious dishonesty and grave misconduct.”
On Oct. 24, La Viña filed an administrative complaint against the four SSS officials with the board of the state-administered pension fund. He alleged that Candelaria and Francisco vetted each other’s personal stock trades, which were then approved by Capulong, as required by the institution’s rules.
But the three officials were in a situation in which their obligation to the public good was in conflict with their self-interest, as they transacted with stockbrokers whom they had cleared to trade on behalf of the SSS.
‘Seal records’
Ongkeko was remiss in his role of providing complete records of the trades of the investment officials, La Viña said.
Valdez said the pension fund’s large investment portfolio would temporarily be handled by the SSS head of internal audit, who was also ordered to “seal records” to aid in the ongoing probe.
The SSS manages about P500 billion in assets, accumulated through the mandatory monthly contributions of 35 million members.
Up to 30 percent of the reserve fund can be invested in the equities market upon meeting the criteria set by the fund’s investment oversight committee.
House inquiry
The chair of the House committee on banks and financial intermediaries on Tuesday said that he would file a resolution calling for an inquiry into the possible misuse of employees’ contributions and whether these were lost in the transactions involving the officials.
Amid the controversy, the group Partido Manggagawa (PM) called for a stop to the proposed hike in SSS contributions.
“The SSS must first clean its house and implement internal reforms before any additional burden is imposed on more than 32 million workers who are its members and beneficiaries,” said PM national chair Rene Magtubo.
Magtubo said the planned yearly increase of 1.5 percentage points in the rate of contributions starting next year up to 2020 would significantly cut into workers’ take-home pay.
Cut perks
He suggested that instead of raising the rate of contribution, the perks and privileges of SSS officials be cut and the fund coverage expanded by running after employers who do not remit contributions.
In a statement, the SSS said on Wednesday that the investigation into the activities of the officials would not affect the pensions and benefits of its members.
“SSS guarantees its members that the Investment Reserve Fund, which came from members’ contributions and investment income, is intact and well-protected,” the SSS said.
The pension fund assured its members that “it has institutionalized procedures to address administrative complaints.”
“Such mechanisms ensure all parties are given due process,” it said.
The Inquirer earlier sought the side of the accused SSS officials, but received no reply, except for Francisco.
He declined to comment citing sub judice rules, since the complaint was pending before the Social Security Commission—the fund’s highest policy making body.
The head of the SSS labor union, for his part, asked that the probe be conducted more circumspectly to spare the officials from “trial by publicity.” —With a report from Tina G. Santos