SSS plans overseas investments this year
State-run Social Security System (SSS) is considering plans for its first foray to overseas investments for 2018. Emmanuel F. Dooc, SSS president and chief executive, said that the pension fund has to diversify its investment portfolio and not limit its exposure to the local economy.
Under the SSS charter, the pension fund is allowed to earmark up to seven percent of its investable funds to the offshore markets.
Dooc also said they already “got in touch with some investment advisers from abroad for diversification purposes.”
“We don’t like to restrict our investments in one basket in the local economy, in domestic investment. So we will definitely study it. That is in our business plan,” he added.The plan of SSS came after the Government Service Insurance System (GSIS) unveiled its intension to revive its global investment program this year amid improving overseas economic environment.
“We would like also to do the same thing,” Dooc told reporters when asked if SSS has plans to invest overseas. “Right now although we are allowed to do foreign investments, we have not invested overseas.”
“But based on the experience of GSIS where they reported good returns, we will also consider that,” he added.
Jesus Clint O. Aranas, GSIS president and general manager, earlier said that they were planning to deploy around $800 million of their investment funds abroad within this year.
Last month, Dooc disclosed that SSS net income declined by 72 percent in 2017 to R9 billion from R32 billion in the previous year due to higher expenditures following the increase in monthly benefits of pensioners.
Dooc said the increase in benefits caused SSS around R32 billion in additional expenses.
President Duterte in January last year approved an across-the-board increase of R1,000 in the monthly benefits of SSS pensioners. This was retroactively implemented by the fund in March.
Amid higher expenses, Dooc said that SSS was determined to ask President Rodrigo R. Duterte to approve its proposed increase in member contribution rate starting April this year.
Dooc has already sought the help of Finance Secretary Carlos G. Dominguez III to push for a three percentage points increase in member contribution.
Dooc said that SSS submitted its rate hike proposal to the Department of Finance, that once approved by Duterte, will effectively raise member’s monthly contribution from 11 percent to 14 percent.
“We also included the request to increase the minimum and maximum monthly salary credit,” Dooc told reporters yesterday.
Under the SSS proposal, the pension fund plans to set its minimum monthly salary credit at R4,000 from R1,000, while the maximum is from R16,000 to R20,000.
“If we succeed in getting all these requests approved by the President, we will be able to collect more or less R45 billion in additional contribution revenues starting from April to end of this year,” Dooc said.
At end-November 2017, SSS’ total assets amounted to R493.29 billion, R16.89 billion higher than the R476.4 billion recorded at the 2016 year-end level.