By Chino S. Leyco
The Department of Finance (DOF) said yesterday issued a strong call on the Social Security System (SSS) to further strengthen its financial standing by improving the quality and performance of its investments as growth in pensioners could soon wipe out its fund.
Finance Secretary Carlos G. Dominguez III issued this challenged as he noted that increased contributions by members as a result of better collection has helped prolong the Social Security Fund’s actuarial life, but much work still needs to be done to extend it.
Dominguez, who sits as ex-officio chairman of the SSS, cited more improvements are required 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.
“This institution must be as reliable as it can possibly be and as efficient as all modern processing technologies enable it to become. The institution must incessantly prove itself worthy of the rising expectations of its members,” Dominguez said.
He said social security contributions and benefits often turn out to be the only reliable means for people to hedge against all uncertainties 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. The principal challenge remains to be prolonging the fund’s life even as retirees become an increasingly larger segment of the population,” Dominguez said.
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 will eventually bring only marginal returns for the institution.
For 2018, the total revenues of the SSS reached P212.55 billion, which was 5.4 percent higher than in the preceding year. In the first half of the year, revenues reached P115.53 billion pesos, 20.9 percent higher than the same period last year.
“Again, only improved financial activity will convince our members that their contributions are indeed investments in the future. Because of the size of the fund SSS manages, there should be no reason why our earnings should not be better than market averages,” the Finance chief said.
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.
On this aspect, Dominguez said the Social Security Commission will continuously monitor the progress of the SSS in accomplishing these two objectives.
“We have to show our members that the institution that collects from their hard-earned income is being managed in the most and efficient prudent way,” he said.
Dominguez said the SSS also need to work more in improving the efficiency of delivering its frontline services, as he observed that its offices still continue to be filled with members waiting for their turn to transact, and processing time for applications of benefits still take too long.
By being more efficient in delivering benefits, the SSS can all the more convince its members that their contributions are worthwhile investments in their respective futures, Dominguez said.
He said investing in digital technologies will not only drastically improve efficiency and make transactions more convenient for members, but will also save the SSS money in the long run.
“The management, however, must very clearly justify these investments by demonstrating their returns,” Dominguez said.
Dominguez also said the SSS must better communicate the fact that contributions to the pension fund should be considered by its members as savings and investments for their future.
“We must continually emphasize that if our members contribute more today, they will have more when they retire tomorrow,” Dominguez said.
He expressed confidence that the men and women of the SSS will continue working hard for the institution to better deserve the trust of its members.
“There are, to be sure, many challenges this institution will face. There are also many opportunities we must not let pass,” he said. “I thank you for your significant contributions to the pursuit of the SSS’ mandate of providing reliable social security protection for its members and pensioners.”