SSS plies provident fund for members

State-owned Social Security System (SSS) will launch in September a provident fund as an investment tool for its members.

Emilio de Quiros Jr., the pension fund’s president and chief executive officer told reporters that the provident fund would provide an opportunity for members to put in their savings besides their monthly contributions to SSS.

“We will be launching a provident fund domestically. It was already approved by Malacañang. Hopefully we could launch it by September to coincide with the anniversary of the SSS,” de Quiros said.

“We are establishing the provident fund to capture savings of members on top of their monthly contributions. This is an optional savings for the members,” he added.

The top executive said majority of the provident fund would be comprised of long-term savings, or that which members can only withdraw upon their retirement at 60 years of age.

“The provident fund would give pension fund members a chance to put in additional savings and earn reasonable yields,” he said.

“About 65 percent of the fund would be long-term savings, while 35 percent would be short-term, which they can redeem anytime,” de Quiros said.

“The long-term fund would have yields at par with the five-year Treasury bond rate, while the short term would be pegged at one-year Treasury bill rate,” de Quiros said.

Treasury bonds and bills are government securities, which have maturities of at least one year and three months up to a year, respectively. More than a third of the pension fund’s investible funds are parked in government securities, which as of end-May stands at P108 billion.

He said the pension fund is now working on strengthening the system support for the proposed provident fund to ensure that there would be no problems in the data once it is launched.

“We are hoping the provident fund would be tax exempt to make it more attractive to our members,” de Quiros said. –Katrina Mennen A. Valdez, Manila Times