Wala pang K: Castelo says SSS contribution hike only acceptable if…
Quezon City 2nd District Rep. Winnie Castelo has proposed a threshold wherein he thinks it would be justified for the Social Security System (SSS) to raise member premium.
“SSS is badly managed and the funds are not invested well,” reckoned Castelo, chairman of the House Committee on Metro Manila Development.
“So, to compel SSS to be more efficient in its investments, let’s require that any increase in contribution should take effect only if SSS achieves an annual average ROI (Return of Investment) of, say, 8 or 10 percent,” he said.
Castelo made the pitch even as the state social fund is slated to raise member contributions this May.
Castelo said that currently, the average return on SSS investments is below 7 percent annually. “That’s very inefficient investing considering that SSS has almost one-half trillion pesos in investable funds,” he noted.
“As of September 2016, SSS has more than P470 billion in investments from which it generated income of only P24.6 billion — for just about five percent ROI.
By the looks of it, Castelo said the SSS earns more from lending to its own members. He said the agency charges its members 10 percent for salary loans plus 1 percent service fee for a total of 11 percent. Housing loans are charged eight 8 to 11 percent depending on amount.
“If the average ROI of SSS is 7 percent as it claims, that means SSS is earning lower from its other investments — higher from lending to its members,” he added.
The contribution increase will take place just four months after the implementation of a P1,000 pension hike for retired SSS members, causing some to raise their eyebrows since as per the law a pension hike cannot be subsidized by an uptick in premium.