Social Security System Chair Dean Amado Valdez called on Congress to prioritize passing laws that will enable the pension fund to invest in Public-Private Partnerships in line with its new thrust to use its members’ pooled fund as capital for infrastructure.
Dean Valdez said that this new idea will directly redound to the working class as they will own stake in infrastructure projects.
“For the first time, SSS funds will be used in profitable nationwide projects. This new thrust has been motivated for the clamor of a higher pension and to ensure that the fund is sustainable in perpetuity,” said Dean Valdez.
SSS is pushing for amendments to its Charter specifically on the conservative provisions of the SSS charter on the investing capacities of the Commission.
The SSS charter provides for certain limitations on the powers of the Commission to invest its reserve fund. At present, SSS could only invest in private securities (40%), housing (35%), real estate (30%), short and medium-term member loans (10%), government financial institutions and corporations (30%), infrastructure projects (30%), foreign currency denominated investments (7.5) and any particular industry that the Commission deems profitable.
“For example, P183 billion of the SSS investment reserve fund is in government securities. This means that the money of the working class is lying in government securities without any asphalt road being built,” Dean Valdez pointed out.
SSS also has plans to diversify assets by directly investing in up to 25 percent ownership in a wide range of industries, including infrastructure projects like toll roads, real estate, utilities and even lotto operations.
Dean Valdez cited the case of the Singapore pension fund which has a forty percent stake of Globe Telecommunications through Singtel which the pension fund owns. “This means that the core net profit of Globe Telco, which according to news reports was at P16 billion in 2016, was plowed back to the Singaporean pension fund to the benefit of its pensioners. This can also be done here at SSS,” he said.
He added that the return on SSS investments has an average of seven percent for 2016, but SSS hopes to bring it up to 15 to 20 percent next year following the enhancements in investment practices and the new investing projects and activities that the agency plans to carry out in the next several months.
“But we need the help of Congress to pass the SS Law amendments that will allow the SS Commission to execute these new investments” Dean Valdez stressed. (PR)