SSS to tap 3 fund managers for portfolio diversification

MANILA, Philippines - The Social Security System (SSS) will tap three local fund managers to oversee a portion of its fund and help diversify its portfolio.

In a statement, the SSS said it initially earmarked P3 billion or P1 billion each to three external managers to boost its investments in equities and fixed-income securities.

To bid for the fund management contract, the companies must be duly licensed and have at least five years in fund management experience, with investment performance published in national broadsheets, the SSS said.

The fund manager must also have assets under management  (AUM) of at least P10 billion in equities and at least P25 billion in fixed income securities as of Dec. 31, 2013.

Interested parties have until Nov. 18 to submit eligibility documents to the SSS.

SSS is allowed to appoint external fund managers as per per Sec.  26-A of Republic Act No. 8282 or the Social Security Act of 1997.

It has  about P400 billion in investible funds.  As of end-June, more than 60 percent of the agency’s holdings are invested in government securities and equities while 20 percent in loans to members, 10 percent in bank deposits and eight percent divided among  corporate bonds and real estate.

SSS collects and manages contributions from workers and employers in the private sector and had more than 30 million members as of June.

The country’s second biggest pension fund posted a comprehensive net income of P32.59 billion in the first half of the year from only P15.73 billion in the same period in 2013.  The surge in earnings was attributed to unrealized mark to market gains.

Revenues amounted to  P75.37 billion, composed of P58.77 billion in  contributions and investment and other income of P16.6 billion.

The bulk or P50.74 billion of the contributions collected during the period came from the  employed sector followed by voluntary paying members  (P5.25 billion) and self-employed (P2.78 billion).

Investments in government securities grew 13.6 percent to from P135.54 billion while  equities were up by P6.47 billion due to favorable mark-to-market valuation.