SOME private-sector workers are protesting the reported plan by the Social Security System (SSS) to raise the “premium” it was charging its members, given the need to raise more money to pay for the pension of its retiree-beneficiaries. They also scored the proposed investment by SSS of P50 billion in public-private partnership (PPP) projects.

“The SSS plans to steal from workers’ hard-earned income and funnel the loot to big foreign and local capitalists. We cannot take this sitting down,” said Elmer Labog of the labor group Kilusang Mayo Uno. He likened SSS to “Robin Hood,” only that the government is the one stealing from the poor and giving the booty to the rich.

The KMU argues that SSS actually has enough funds to raise workers’ pensions without having to increase premiums. It fears that premiums are proposed to be raised only so that SSS can “aid the government in its PPP projects, and big capitalists who want assurance for their investments” in these projects.

While it is easy enough to dismiss the KMU protest as the usual ranting of the Left, its caution with respect to the care and management of SSS members’ money should be heeded, if not fully supported. The SSS, after all, manages private workers’ money—contributions by its members—and not “government” money like government fees and taxes.

And while the SSS is a government agency run by government appointees, it was created by law to care for private-sector workers. The money it manages, which is the pension fund of private workers, is owned not by the government but by the workers themselves—the SSS members. The government does not contribute to the fund, so why should it take liberties in spending it?

Just last week, even the Department of Justice (DOJ) reportedly warned the SSS particularly against investing its money in publicly listed companies that lack track record of profitability. In a three-page legal opinion, the DOJ said that under the Social Security Law (Republic Act 1161), the SSS should observe “prudence and diligence” in managing pension funds.

“Administrative bodies derive their power from the laws of their creation, that any power sought to be exercised must be found within the four corners of the statute under which the agency proceeds, and that when authority is given by statute to accomplish a stated governmental purpose, there is also given, by implication, authority to do everything necessary to accomplish the purpose that is not a violation of the law or of public policy,” the DOJ said.

The legal opinion was sought by SSS itself, which reportedly wanted to buy more shares of stock in publicly listed companies where it already owned shares, even if these companies did not meet the criteria set by the Social Security Law. Under that law, the SSS can reportedly invest only in “solvent corporations” with track record of profitability for at least three years, and payment of dividends at least once over the same period.

It remains unclear what the SSS intends to invest in. But the DOJ said that in whatever investment, the SSS was required by law to “manage and invest with skill, care, prudence and diligence.” This becomes more important in light of a reported Commission on Audit (COA) inquiry into the sale by the SSS of over 62 million shares in the Manila Electric Co. or Meralco.

The shares were reportedly sold at P90 per share or a total of P5.66 billion, with the buyer making a P1.133-billion down payment, and paying the balance in three tranches. The COA had reportedly questioned the rationale behind the SSS decision to sell its shares for over P5 billion to a buyer with net assets of only P60 million.

And while the SSS management claimed it made money from the sale—at least P2 billion in profit as it sold the shares at a premium or 51.26 percent over its market value and would still collect additional fixed-interest payments—it is still to justify how it considered a buyer that seemingly lacked the ability to pay for the purchase.

Despite having been an SSS member for almost 20 years now, I have waning confidence in the ability of the SSS to meet its pension obligation to me once I retire. But I continue to “risk” making voluntary premium payments quarterly just in case a competent overhaul of the pension system is actually done by the next three government administrations.

My understanding of my situation is that after completing 20 years of premium payments, I can actually stop making additional contributions but still expect to draw a retirement pension in light of 480 months of premium payments. And if this is truly the case, considering present circumstances, I have little incentive to continue making additional contributions.

Already, the state-run Government Service Insurance System (GSIS) had reportedly committed to invest $300 million in a government-initiated infrastructure fund. This is in addition to the P200-billion fund that the GSIS would set up with the SSS and the Land Bank of the Philippines and the Development Bank of the Philippines to invest in bonds to be issued by PPP proponents.

While one can understand that the SSS and the GSIS need to make good returns on investments to continue servicing the needs of their members, somehow one tends to be left with the impression that despite concerns and misgivings by members, government-appointed fund managers will continue to take liberties with their members’ money.

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