SSS could face financial trouble, House leader says

House Majority Leader Eduardo Gullas (LAMP, Cebu) warned officials of the Social Security System (SSS) yesterday that the institution could face financial trouble unless it expands its membership base and manages its funds prudently.

Gullas said the SSS has been incurring a deficit since 1992 and has been dipping into its investment income to pay for members' benefits.

Citing the System's own data, the House official said from 1992 to 1998, the pension fund spent a total of P129.57 billion (P116.72 billion for benefits and P12.03 billion for operating expenses).

For the same period, the System collected only P116.72 billion in member contributions, or a deficit of P12.85 billion, he said.

"This means that over the same period, the SSS used P12.85 billion of its investment earnings to bridge the deficit," he added.

Gullas pointed out that before 1992, contributions had always surpassed payments for benefits and operating expenses.

He urged SSS officials to reverse the trend by recruiting more members from the self-employed, house helpers, farmers, market vendors, fishermen, and others similarly employed.

It should also manage its funds prudently, he said.

There have been doubts raised by some concerned officials about the decision of SSS officials to invest in some publicly-listed companies and in bank mergers.

Finance Secretary Jose Pardo has cautioned these officials to go slow in sinking funds in corporate mergers.