SSS to revise ROI to 15-20% this year

The Social Security System (SSS), the state-owned pension fund for private employees, is targeting to raise the return on investments to an average of 15 to 20 percent this year from an average of seven percent last year, its chairman said.

“We hope to bring it up by 15 to 20 percent this year following the enhancements in investment practices and the new investing projects and activities we plan to carry out in the next several months,” SSS chairman Amado Valdez said.

SSS has an Investment Reserve Fund (IRF) amounting to roughly P480 billion, said SSS president and CEO Emmanuel Dooc.

To maximize returns, Dooc said the pension fund plans to look for investment opportunities abroad, similar to the strategy of the Government Service Insurance System (GSIS). He said SSS can invest abroad to a maximum of 7.5 percent or roughly P36 billion of its IRF.

Valdez said SSS is also pushing for amendments to its charter to be able to remove the conservative provisions on SSS’ investing capacities.

For instance, SSS could only invest in private securities, housing, real estate, short and medium-term member loans, government financial institutions and corporations, infrastructure projects, foreign currency denominated investments and any particular industry that the Commission deems profitable.

But SSS wants to diversify assets by directly investing up to 25 percent ownership in a wide range of industries, including infrastructure projects like toll roads, real estate and even lottery operations, which are being studied rigorously by the agency.

“For example, these innovative approaches of SSS in earning more for the pension fund may even result in the eradication of jueteng operations which is controlled by the rich. SSS plans to conduct lottery operations on its own and share the income from it to our pensioners,” Valdez said.

“With proposed innovations in investments, SSS is shaping a new developmental ideology to give the working class an opportunity to be the richest in the country through their pooled savings in the pension fund,” he said.

Early this month, President Duterte approved an acrossthe-board pension increase of P2,000 that would benefit over two million pensioners, with the initial P1,000 increase immediately and another P1,000 in 2022 or earlier.

At the same time, Duterte approved the proposal of the economic managers to ensure the sustainability of the pension fund by implementing an additional 1.5 percent contribution rate and lifting the maximum monthly salary credit (MSC) to P20,000 from the current P16,000 by May 2017.

Dooc said the P1,000 increase in SSS benefit is already fully financed and that the additional hike in contribution would be used to enlarge the IRF.