SSS stretches actuarial life by 12 years

this story was taken from www.inq7money.net
URL: http://money.inq7.net/topstories/view_topstories.php?yyyy=2006&mon=06&dd=14&file=8

Posted: 11:32 PM | Jun. 13, 2006
Doris C. Dumlao
Inquirer

(Published on Page B10 of the June 14, 2006 issue of the Philippine Daily Inquirer)

THE Social Security System said it will be able to stretch its actuarial life up to 2031 from 2019, as earlier projected, through the implementation of administrative reforms and with improving market conditions.

Earlier, the SSS warned that its reserves might be depleted as early as 2019. But with the administrative reforms, along with an increase in members' contribution a few years ago, the SSS said it will be able to extend its projected actuarial life up to 2027.

Another four years will be added in view of the improvement in market conditions that raised the SSS' earnings from its stock investments, SSS president Corazon dela Paz told reporters yesterday.

"But our concern is that since 2000, we have not increased the benefits paid to members," Dela Paz said.

Over the last two years, she said the SSS had concentrated in improving the pension fund's financial health.

"We cannot ignore that at some point, we have to improve the benefits to pensioners. We are not against making additional payment to pensioners. Unfortunately, it can only be done if we can identify a source of funding," Dela Paz said.

She said other state-owned organizations that provide benefits, like Philhealth, were getting shares in the taxes collected by the government.

While the SSS had stretched its actuarial life for now, Dela Paz said the pension fund was still facing a tough environment.

"The (Social Security) System will be 50 years old. Many of those who joined in the early stages are starting to retire. Even if we don't increase the benefits, the number of retirees are increasing," she said.

Despite the continuing financial challenges, the SSS has lowered the interest rate on its business and social loans to support small and medium scale enterprises and spur economic activity in the country.

The interest rate cut took effect last April.

Among the business loans offered by the SSS were: Special Financing Program for small and medium scale enterprises; Financing Program for Tourism Projects; Hospital Financing Program; Financing Program for Educational Institutions, including vocational and technical schools; and Industry Loan Program.