AS a Social Security System (SSS) member, your right to social- security benefits is assured by the number of contributions you have made to the pension fund. For instance, to be entitled to sickness benefits, you only need at least three monthly contributions within the 12-month period preceding the semester of illness. To qualify for disability or death pension, the minimum number of contributions required is 36 months; for retirement pension, 120 months. Your contributions keep the pension fund going and finance the benefits you receive.
Last year the SSS collected more than P120.6 billion in contributions, out of which over P102.6 billion were paid in benefits to almost 3 million beneficiaries. Under the Social Security law, funds not immediately needed to pay benefits are put on reserve and are invested with skill, care, prudence and diligence.
Over the years, the SSS has built an asset pool amounting to P427.17 billion as of end-2014. It invested more than P394.5 billion of its assets and earned more than P34.5 billion from its investments in government securities, private equities, loans to members (salary, educational, housing), corporate notes and bonds, bank deposits (short-term money placement) and developmental loans. Minus operating expenses incurred in running a service-delivery network of 283 branches and service offices here and abroad, the SSS posted a net profit of P44.5 billion as of year-end 2014.
Based on the 2011 actuarial valuations with updates as of December 2013, the life of the SSS pension fund is estimated to last until 2042. This means that it can pay all its obligations—retirement, sickness, maternity, death, disability, funeral benefits—until 2042, which is 27 years from now. Some might think this is a long period of time, but financial experts say otherwise, stating that a pension fund must aim for perpetuity or an actuarial life, of at least 60 to 70 years. To achieve this goal, the SSS must continue with its reform agenda, seeking to gradually lengthen the actuarial life of the fund and prudently discharge its fiduciary duties so that you, your children and your children’s children will still enjoy the benefits the SSS provides.
Having said all these, let me go back to the question: “Where do your contributions go?” They go back to you or your beneficiaries in the form of benefits that you or they can enjoy for life.
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For more information about the SSS and its programs, call our 24-hour call center at (632) 920-6446 to 55, Monday to Friday, or send an e-mail to member_relations@sss.gov.ph.
Susie G. Bugante is the vice president for public affairs and special events of the Social Security System. Send comments about this column to susiebugante.bmirror@gmail.com.