Numbers are central to most human activities. We number everything we do to assign values, weigh variables and track data. You can argue about the quality of accomplishments but never when numbers are shown for exemplary performance.
The numbers shown by the Social Security System (SSS) over the past five years speak of how well the incumbent SSS administration manages the four components of the pension fund’s finances, namely: contribution collections and investment income for the revenues side; and benefit payments and operating expenses for the expenditures side. One of the solid affirmations of the SSS’s various financial feats is the growth in SSS assets over the past five years, from only P146 billion in 2010 to P427 billion in 2014.
Striving for gains and surpluses
Members’ contributions are considered the lifeblood of the SSS, accounting for about 80 percent of total SSS revenues, while the remaining 20 percent comes from earnings generated from investments.
SSS contribution surplus, defined as the excess in contribution collections over the combined spending for benefits and operations, has remained positive over the past three years, finally reversing the string of deficits in 2012. In the past, this surplus was measured in terms of how much contribution collections have surpassed benefit payments in a given year. Despite presently adopting a more stringent definition to also include the capacity of contributions to cover operating expenses, the SSS still achieved yearly surpluses of P2.31 billion in 2012, P3.97 billion in 2013 and P9.94 billion in 2014.
Impressive gains were also recorded in investment income since 2011. The SSS return on investments (ROIs) consistently outperformed benchmarks, such as the 10-year Treasury bonds and the 364-day Treasury bills, with the SSS ROIs ranging from 8.3 percent to 10.8 percent for 2010 to 2014.
The trends in SSS net revenues offer a comprehensive look at the agency’s financial performance, comparing the total revenues from contributions and investments vis-à-vis total expenditures for benefits and operations. Annual SSS data since 2000 have all shown positive net revenues, but worthy of note was the steep increase in average net revenues of P33 billion recorded for 2010 to 2014, as compared to the P8 billion yearly average for the years 2000 to 2009.
Prudent payments
Positive net revenues are not solely the results of strong income generation, but of prudent management of expenses, as well. Benefit disbursements were managed through initiatives to ensure that only the rightful beneficiaries receive SSS benefits, such as the enhanced Annual Confirmation of Pensioners Program.
The SSS charter, which is the Social Security Act of 1997, limits the agency’s spending for operating expenses to not more than 12 percent of contribution collections and 3 percent of other SSS income. Despite the rising demand in services from the continuously expanding SSS membership, which is now approaching 33 million, the percentage of SSS operating expenses as compared to the charter limit has remained conservative, further decreasing from 69 percent in 2010 to 52 percent in 2014.
Numbers do not lie, so credit should be given to where it is due. The financial successes of the SSS today should be attributed to the present management under the leadership of President and CEO Emilio de Quiros Jr. and to the strong support of the members of the Social Security Commission. They are a select number of individuals who have faced and embraced the enormous challenge as fiduciaries of the Filipino workers’ pension fund.
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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.