Defending the SSS-A A +A
Wednesday, October 16, 2013
NOW it’s the board of directors and officers of the Social Security System (SSS) who are under fire. Media and SSS members have taken them to task for the millions in “performance-based bonuses” that the directors have approved for themselves and for most employees of the SSS.
Admittedly, the timing was bad, the announcement of the bonuses coming as it did on the heels of the Janet Napoles and the PDAF controversy. An already-sceptical public tended to view it as another case of unfeeling government officials making hay while poverty-stricken citizens have all they can do to make ends meet.
But was the bonus really illegal or untimely? I personally do not believe so. Let me explain my point by discussing the workings of the Social Security System.
First, let’s state the basic fact that the average SSS member receives approximately six (6) times more in benefits (health, medical, pension, etc.) from the System than he and his employer remitted during his entire period of employment. That means that for every peso he puts in, the member gets on the average six pesos in total benefits, or P600,000 for every P100,000 invested.
If the SSS were therefore to rely only on the remittances of the employers and the employees, the System would be bankrupt on its first year. The fact is, it has lasted for more than fifty years without additional infusion from Government. How did it do it?
Sound investments did it, and are doing it today. What the board of directors and officers are obligated by the SSS charter to do is invest the money remitted to them into income-earning investments; in stocks, in government bonds, in interest-bearing lending programs to members, etc.
The second basic fact is that government officials, especially the elected ones, do not have the fundamentals to be investment experts. You leave the management of the money of the SSS to them and the entire System will collapse faster than you can say “Janet Napoles!!”
For the system to work, the SSS looks at and engages the services of experts and professionals from the private sector, the best-of-the-best, the ones who know how to squeeze maximum profit out of stock and bond purchases. Emilio de Quiros, the current President of the SSS for example, was a top official of the Bank of the Philippine Islands before he was taken in by the SSS. He made money for BPI.
These are the people who multiply our remittances 600 percent, so we can get more from the SSS than we put in. Naturally, they do not come cheap. Many of them belong to the upper ten percent of Society. For Government to lure them into the SSS, Government must compensate them in the manner they are used to and deserve.
On the other hand, Government created the “Governance Commission on Government-Owned and Controlled Corporations” (GCG) to monitor the operations of the offices like the SSS. The GCG is around to serve as a check against abuses or excesses.
The GCG recently came out ratifying the decision of the SSS board and declaring the performance-based bonuses as not only legal but proper, all things considered.
All things above considered, I too will not quarrel with the SSS.
Published in the Sun.Star Bacolod newspaper on October 16, 2013.