- John Tria
Weighing the SSS pension fund increase
The recent SSS pension fund increase created significant discussion about how government corportions and state-managed funds ought to be managed, and how President Duterte makes strategic decisions.
Any discussion on the present and future of state pension funds always brings with it a necessary understanding of the actuarial life of such an institution, meaning, hiw well such a fund that pools small contributions can serve the future need of those who contribute to it.
Thus, decisions on it take on a strategic nature, since the benefits or dangers emanating from it will be felt at a future time, long after the terms of trustees, officers and our political leaders.
Thus, any discussion on increasing benefits threatens a fund already hobbled by poorer-than-hoped-for collection.
After all, these pooled funds are aimed at securing benefits for members. Any investments entered into has to hold this as a sacred objective by incurring gains to strengthen the fund's financial position.
The more members contribute, the stronger the fund. Whatever the SSS board decides to invest in will need to translate to better investment returns for the members' funds.
In other countries, funds like the SSS are a national concern, especially in places like Europe or Japan that have aging and declining populations, the viability of their funds are threatened when pensioners' needs outweigh the capacity of younger working members to sustain it.
Thus, it matters that the management of these funds be done judiciously with care and regard for the members first.
Thus, we are, for once, discussing vital reforms about this fund that previous governments sadly glossed over.
In addition to the President's admonitions to the SSS, it would be good to consider the following suggestions:
1. Ending ENDO contractualization will strengthen the fund, since it will allow more members and employers to pay the right remittances and do so on time. Employers engaging third-party labor contractors absolve them of this important obligation. Is this partly to blame for the poor collection?
2. Cutting fat allowances for directors and officers. Now is not the time for largesse. When enterprises fail, sacrifice is needed. Those appointed to the SSS board are required to render service to restore the fund to optimal health. This was floated as an issue during the last government, but was anything done about it?
3. A national program for healthy living needs to be revived. Remember the SIGLAKAS exercises? Something like that, along with healthy eating by cutting rice intake to lower the prevalence of chronic diseases like diabetes and hypertension, which have become mainstream ailments no longer reserved for the affluent. Push for higher sin taxes on liquor and cigarettes to bring down consumption.
A big part of the SSS fund expenditures are disability benefits for members who fall ill. Having less unhealthy members is good for families, and means less funds drawn for the purpose.
4. Review all investments entered into and, if necessary, pull out of failing ones or those with risks that are too high. After all, it is not Malacanang's money being invested, but the member's money. The members don't deserve to be told that their pensions will suffer from bad invesrment decisions.
For the first time, the President has admonished everyone concerned to do the right thing and make this fund a healthier one for the future, which is where we all have to meet it.
Is it a populist measure? I believe making decisions to protect the fund while granting the clamor is more pragmatic than populist. This issue opened the SSS to our collective scrutiny, affording all of us the chance to monitor the effectivensss of this decision over time.
Sadly, this contrasts with former President Aquino who was bullheaded enough not to grant the increase. Yet, did he do or say anything to improve SSS' efficiencies? These glaringly faltered over the last decade, under his watch. Could he have done more early in his term to place the fund in a better position at the end of his presidency?
As these discussions are now openly tackled, the bigger issue all SSS members have to deal with now is to monitor and question how this fund henceforth will be managed, and how well these measures translate to better results in the future, where we and our children will be.
Those who are members please monitor this fund's performance.