Dominguez to SSS: Deliver higher investment returns to meet growing pension needs
The Social Security System (SSS) should strengthen its financial standing by improving the quality and performance of its investments, and to use modern digital tools to reduce overhead expenses and better serve its members.
Thus said Finance Secretary Carlos Dominguez III—the ex officio chair of the state-administered private sector pension fund—who noted that increased contributions by members as a result of better collection had helped prolong the Social Security Fund’s actuarial life.
Despite this, much work still needs to be done to extend it as the rise in the number of its beneficiary-pensioners could soon outstrip the growth in the number of the fund’s actively employed contributors, he stressed.
“This institution must be as reliable as it can possibly be and as efficient as all modern processing technologies enable it to become,” Dominguez told SSS officials and employees on the occasion of the institution’s 62nd anniversary. “The institution must incessantly prove itself worthy of the rising expectations of its members.”
The finance chief said social security contributions and benefits often turn out to be the only reliable means for people to hedge against unplanned contingencies as communities become more urbanized and more Filipinos become more mobile and join the formal economy.
“Over the next few years, as the larger demographic picture changes, this institution will face multifold challenges,” he said. “The principal challenge remains to be prolonging the fund’s life even as retirees become an increasingly larger segment of the population.”
While the SSS has substantially increased its revenues as a result of better collection of members’ contributions, Dominguez reminded its officials that even with this “impressive improvement,” such earnings would eventually bring only marginal returns for the institution.
For 2018, the total revenue of the SSS reached P212.5 billion, which was 5.4 percent higher than in the preceding year. In the first half of 2019, revenues reached P115.5 billion pesos, 21 percent higher than the same period last year.
Dominguez said this was why the SSS needed to dramatically increase its income through improvements in the quality and performance of its investments, better financial management and enhanced market engagement, which were all achievable, given the rapid expansion of the economy and the country’s improved business outlook.
“Again, only improved financial activity will convince our members that their contributions are indeed investments in the future,” he said. “Because of the size of the fund SSS manages, there should be no reason why our earnings should not be better than market averages.”
Dominguez also cited the need for the SSS to cut back on its overhead expenses and expand the use of modern digital technologies to improve the access of members to the services that the institution offers.
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