SSS urged to use 30% of investment earnings to fund increase in pension

MANILA, Philippines — An organization of retirees is urging state-run pension fund Social Security System (SSS) to set aside 30 percent of its earnings from investments to fund  an increase in pension.

In a statement, the Philippine Association of Retired Persons Inc. (PARP) said the pension increase “can be programmed periodically.”

SSS announced on Friday that it earned less from its investments last year due to the economic fallout from the pandemic, but the rate of return still outperformed those of key market indicators.

The pension fund earned P32.47 billion in 2020 as investment income from government securities, member loans, properties and equities, down by 26 percent from P40.97 billion in 2019.

SSS president and chief executive officer Aurora Ignacio said the fund’s investment portfolio still provided good earnings last year even as the pandemic rattled the stock market.

“The nationwide community quarantine measures drastically affected the stock market since March 2020. Despite this, SSS investments continued to perform well and provided decent returns last year,” she said.

The pension fund’s return on investment (ROI) settled at an average of 5.89 percent, above the 10-year Treasury bond and 364-day Treasury bill rates which averaged 3.43 percent and 2.42 percent last year, respectively.

The pension fund’s 2020 ROI was also way above national economic indicators particularly the 9.50 percent decline in gross domestic product (GDP) and 2.60 percent average inflation rate for the year.

PARP also urged the government that seniors be represented in the board of trustees of the Government Service Insurance System (GSIS), board of commissioners of the SSS, and board of directors of the Philippine Health Insurance Corp. (PhilHealth).

“Seniors and retirees from government and the private sector accumulated tremendous knowledge, capacity and experience which government can tap to assist the concerned government offices in preparing welfare program for seniors,” the group said.

In 2017, President Duterte authorized the P1,000 increase in the SSS pension of retirees.

The pension fund, however, has said there is still no basis for granting the second tranche of the pension increase for another P1,000.