The Social Security System (SSS) plans to expand the use of its investment funds to empower its over 33 million members, who represent the country's working population, by giving them a "louder voice" in sensitive key issues such as rate increases for electricity, water and other basic utilities. Social Security Commission Chair Dean Amado D. Valdez said that while SSS investments primarily serve to boost the pension fund's earning capacity, enabling it to afford giving higher benefits for members, SSS should also find ways to capitalize on its huge potential to promote social justice. "It is already a given that SSS serves as a tool for social justice through the cross subsidies it provides - the young subsidize the old, the healthy subsidize the sick, those earning more subsidize those earning less, and even males subsidize females through SSS maternity benefits," Valdez said. But he added that "SSS should seek to bring this concept of social justice further by maximizing the use of SSS funds to gain representation in corporations involved in basic utilities such as electricity and water. This gives SSS members a louder voice during deliberations on water and power rate hikes, since these have a significant and direct impact on the lives of workers and SSS pensioners." SSS can use its investment funds to seek 25 percent ownership in utility corporations in return for the same percentage of their income. If rate hikes are justifiable and necessary, then SSS members will still benefit since the agency will receive higher income from its 25 percent share in the earnings. The proposal of SSS to implement the P2,000 pension increase in two tranches, with the initial P1,000 across-the-board pension hike scheduled in 2017 and the remaining P1,000 in 2022 or earlier, will provide SSS with additional funds that it can invest to enhance its generation of revenues. Valdez said the initial P1,000 pension increase offers a win-win solution since SSS pensioners will immediately get much-needed financial assistance. At the same time, it puts SSS in a better position to manage the impact of the pension increase on SSS' financial viability and earning capacity. "If we immediately increase pensions by P2,000, SSS funds will be depleted. It will force us to dip into our investment reserve fund just to afford the higher benefits. We also lose the opportunity to invest in utilities as well as infrastructure projects with a sovereign guarantee," he said. He said that granting the P1,000 pension increase for the meantime gives SSS the chance to allocate its investible funds to more income-generating ventures, making it possible for SSS to grant the second P1,000 pension increase sooner without compromising its long-term financial viability.
Source: Philippine Information Agency