FINANCIAL giant Sun Life of Canada has recently collected data on the circumstances under which we in the Philippines spend our retirement. Its published results make depressing reading. Sun Life’s report states that of 100 Filipinos who retire, “45 are dependent on their relatives, 30 percent are dependent on charity, 22 are still working and only two are financially independent.”
Sun Life does not explicitly mention SSS/GSIS. Is that what it means by “charity”? Our encounters with SSS and, especially, GSIS have left us in no doubt that we are not dealing with charitable institutions.
Seriously though, we are talking about an important topic and we are looking to uncover the reality of our situation. To examine Sun Life’s data, the observation that 45 percent of retirees are “dependent on their relatives” needs evaluation. Fellow retirees, who have serious “failure to launch” problems, hooted with derision. The reality is that in a society where the government-supplied safety nets vary between limited and non-existent, the family unit is bonded so that three or four generations are living under the same roof. It is not possible or desirable to separate who is providing what. All we know for certain is that 45 percent of retirees being dependent on their relatives is meaningless without stating the proportion of retirees that are providing facilities, for example housing, to other family members.
It is true that countries, including Canada from whence Sun Life has come, have governments which take on substantial welfare responsibilities. In these countries, families can and do get on with their own lives. “To each his own” is the calling cry in countries which have nuclear families. Our system of extended families has much to commend it and hopefully would not change very much even if our retirees were better funded.
Sun Life Financial Philippines is trying to educate us on the value of saving for our future through what it describes its financial literacy advocacy called “It’s Time.” Gregory Martin, Sun Life’s chief strategic Marketing officer, states portentously: “We want every Filipino to assume an active role when it comes to his/her financial needs.” Unbelievably he plows on, oblivious to the cynicisms of the great unwashed.
“We all see a doctor for our medical needs. We all need to see a financial advisor for our financial needs. Financial planning is both a process as well as a lifestyle change. It can’t happen overnight but Sun Life can make it easy for them!”
You can’t be serious.
To underpin Sun Life’s message and to reinforce its financial sophistication, it has recruited those well-known exemplars of lifestyle changes, James Yap and Baby James. We look to these two role models to show us the importance of preparing for the future.
Sun Life is not content. It is also excoriating us because, according to this bossy financial institution, 90 percent of us bequeath nothing to our loved ones when we pass away, thus leaving many young dependents with an uncertain future. Exactly. We want our dependents to have an uncertain future. We want them to make their own way in life. We do not want to pre-empt our loved one’s choices after we die. We do not want to create a situation for them whereby their life choices are largely determined by us. That is not fair. What we want to do is to create an environment for our successor generation which has an attractive relationship between effort and reward. We do not create this by swamping it with resources that we could not be bothered to consume when we were alive.
Singapore, perhaps the quintessential Nanny State, has its equivalent of SSS which it calls CPF (Central Provident Fund). CPF has recently given its members (which means everybody, since membership id compulsory), the option to take a large amount thereby leaving crumbs to its dependents or vice versa. The vast majority of CPF members chose the large amount for themselves and the minimum for their offspring.
This would not sit well with Riza Mantaring, President Sun Life of Canada (Philippines) Inc., who opines “Filipinos don’t understand the importance of preparing for the future.”
To prepare for the future means to forego the pleasures or sometimes, the necessities of the present. The first step for most of us is to make our contributions to the SSS. There are only 29 million SSS members (there should be at least 50 million) and these 29 million have associated with them a total of around P238 billion in contributions. This sounds a lot but is only P8, 000 per member or, worse still, P4, 000 per adult.
We wish the SSS well in its attempt to extract, however unwillingly, employers’ contributions. SSS states that there are over 6 million members whose employers are negligent in their contribution. The government has recently passed an act giving the recalcitrant employers a few months to make amends. This happens about once every 10 years and I doubt whether this time will be much more successful than before.
Technology has improved matters in that SSS members are now more able to obtain account information. Nasty surprises abound, unfortunately. Long-serving employees have found that their employers have not paid contributions. We trust that SSS can help without the likely concomitant employer/employee friction.
To prepare for the future, after ensuring that we are able to maximize SSS benefits, it seems a good idea to address our multifarious “utangs” with banks and other financial institutions. After we have liquefied our indebtedness to those to whom we owe money, it is pleasant to have a bit of liquidity.
Then, but only then, shall we think about Sun Life of Canada for whom, despite our observations above, we have a high regard.
You need to do more nitty-gritty work, Trevor!