VALDEZ DECIDES FOR THE WORKERS: Dean Amado Valdez, chairman of the Social Security Commission (SSC) wants to improve the financial capacity of Social Security System (SSS) to serve its members better.
By: Marites Toledo
The Social Security System (SSS) should have a good financial standing for a long period of time to consistently provide higher benefits to its members.
However, Dean Amado Valdez, chairman of the Social Security Commission (SSC), said the Congress should make the necessary amendments to the SSS Law to improve its income in a long-term basis.
SSC manages SSS.
Valdez said raising the SSS income for a long-term basis will never happen if we maintain that the existing limitations stipulated in the fund’s law.
Valdez, who was a top notch Dean of the College of Law of the University of the East (UE), strongly argued that SSS needs “greater investment flexibility to bolster its generation of needed revenues for granting higher benefits for members.”
The SSS Law, which is already the agency’s charter, was last amended in 1997.
Valdez said the SSS investment capabilities as of present is only “limited [to] current market trends.”
Valdez argued that the changes are necessary to improve SSS capacity to raise its financial capacity for a long period so as to avoid problems, or hindrances, in increasing the agency’s benefits in the future.
“Aside from expanding our investment portfolio, we seek the amendment of the conservative provisions of the SSS charter particularly on the investing capacities of the [SSC],” he said.
He noted that the SSS charter limits the powers of the SSC to invest its reserve fund like private securities, housing, real estate, short and medium-term member loans, government financial institutions and corporations, infrastructure projects, foreign currency denominated investments, and any particular industry that the SSC thinks profitable.
Valdez said SSS will aggressively push for direct capital infusion of the pension funds to tollway constructions under the Private-Public Partnership (PPP) to generate lifetime income, and to provide more meaningful benefits to its members once the SSS Law is amended.
He said SSS invested in the South Luzon Tollways through corporate bonds, which generated a yield of close to seven percent in the past.
“This time, we want to explore the possibility of funding projects for new tollways, income of which is for a lifetime. We plan to invest 25 to 30 percent of our reserve fund in these road development projects and we expect the same rate of return, if not better,” Valdez said.
“SSS seeks include new investment vehicles where SSS can invest their reserve fund without compromising the basic investment principles of safety, good yield and liquidity. We hope that this legislation will be passed immediately to help us in our pursuit to increase the income of the agency and enhance the benefits for our members,” he explained.
Thus, SSS is hoping that Congress will seriously consider its appeal, Valdez said.