SSS takes umbrage at corruption claim
THIS REFERS to Rickie Fernando’s letter, “No need to raise SSS members’ monthly contributions” (Opinion, 2/15/16).
We take umbrage at the allegation that officials and employees of the Social Security System are corrupt. His accusation contradicts SSS’ “very good” net sincerity rating of +57 in a 2015 Social Weather Stations Survey of Enterprises on Corruption. Hundreds of business executives across the country answered the survey which placed the SSS second among government offices in sincerity when it comes to fighting corruption.
Fernando should have done his research first on the credentials and employment records of the SSS officials and employees before making careless remarks on our competence.
With a return on investment (ROI) of 6.9 percent in 2015, outperforming market bench indicators like the 4-percent ROI on the 10-year treasury bond and 2.1-percent ROI of the 364-day treasury bill, we find it ironic that Fernando would insinuate that the SSS’ investment people are incompetent.
The SSS’ total assets grew by 50 percent from P298 billion in 2010 to P445 billion in 2015. Its average net revenue quadrupled from P8 billion (2000-2009) to P35 billion (2010-2015). Since 2012, the SSS has had contribution surplus, which indicates that members’ contributions are more than enough to fund benefit payments and operating expenses without dipping into the investment reserve fund. In 2015, the contribution surplus amounted to P11 billion. These numbers show the financial expertise of the SSS’ ranks.
The SSS’ assets are either sold or retained as SSS property due to the expected increase in their value, even as disposal of assets through public bidding is continuously being done. Generated earnings from the SSS’ real estate assets reached P2.01 billion in 2015.
In the past five years, the SSS managed to keep its operating expenses at judicious levels despite higher transaction volumes and the increase in the number of its branches and offices. In 2015, for example, the SSS’ operating expenses was only 5.4 percent or P8.80 billion of its total revenue of P162.50 billion.
Fernando should study the SSS’ mandate and structure so he would know that its officials, except for the president and commissioners, have security of tenure under civil service rules.
As a government agency, the SSS’ financial statements are examined by the Commission on Audit to ensure compliance with existing financial policies and guidelines. The SSS-audited financial statements can be accessed anytime in its website under the Transparency Seal Icon.
Fernando’s claim that members’ contributions only account for 28 percent of pension payment shows his ignorance of the SSS’ financial data. In 2015, the total benefit disbursements was P112.58 billion. Of this amount, 75 percent or P84.44 billion went to pension payments. Funds for benefit payments came from contributions collection (82 percent) and investment income (18 percent).
We would like to point out that the SSS pensions are low because contributions are low. The SSS contribution rate is only 11 percent of the P16,000 maximum monthly salary credit (MSC). This contribution rate is very low compared to those in neighboring countries like Malaysia (26.25 percent) and Vietnam (30.50 percent). The SS Charter does not index the SSS pension to inflation or cost of living. This is a limitation of the SS Law.
Despite the low contribution rate, the SSS is able to provide a generous rate of return on members’ contributions. For example, a member who paid the P110 minimum contribution for 10 years and will receive a monthly pension for 10 years would have a return of P156,000 from his P13,200 paid contributions since minimum pension is at P1,200 per month.