Sunday, September 24, 2006

Our Social Security System (SSS)

If you are employed in the private sector, you can not escape the SSS. They are present on every payslip you receive. Their mandate is to provide security through pensions to private sectors employees when they retire. Recently they announced triumphantly the following:
1. 15 days after date of retirement, an employee will start getting his pension.
2. Another condonation of penalties on long overdue low-cost hosuing loans is on the way.
3. SSS made a profit of P3.7B
4. The life of SSS stretches to year 2031.

Let us analyze these claim :
First. The 15 days retirement-pension scheme still need to be seen. Currently the SSS took 90 days before a retiree receive his first pension check.
Second. This condonation of penalties is at least the THIRD such amnesty program.They are rewarding delinquent borrowers. For those who have a background in business, this is a constant bewilderment. Why is that SSS does not reward those who pay religiously?.
Third. In a social security system a profit should be distributed as dividends to members. So when they announce that they earn 3.7B it is nothing to members unless it will be transformed as dividends.
Fourth. When they announced this you have to ask the devil for the details. To stretch the life of a social security system they WILL NOT INCREASE THE PENSION OF THE MEMBERS unless again if they increased the contribution of the current members.
In conclusion, work as if SSS will not be there when you retire. Save as if SSS will not be there to provide you a pension check. Invest in stocks or mutual funds now as if the SSS will again take a cut of your salary tomorrow.


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