SOCIAL SECURITY System (SSS) is eyeing to tap the private sector to insure some of the state-run firm’s liabilities, as its expenditures continue to grow on the back of higher pension payments.

The government-run pension fund also said their decision to look for private insurance companies to secure their risks and liabilities comes after the Government Service Insurance System (GSIS) declined their request.

“They answered us formally. They declined. It’s not within their mandate to cover private assets and non-government employees or workers…unless they amend their charter,” SSS President and Chief Executive Officer Emmanuel F. Dooc told reporters.

In June, the SSS chief had said they have consulted with Finance Secretary Carlos G. Dominguez III on their proposal to tap GSIS to cover some of its liabilities. Mr. Dooc had said the Finance chief was open to their proposal.

“And they (GSIS) expressed concern why a social security entity will take on the risk of another social security,” Mr. Dooc said.

The state-run pension’s funds total assets stood at P492.404 billion at end-March, while its liabilities reached P17.572 billion.

In the first quarter, SSS reported its total expenditures reached P44.772 billion, climbing 43.06% from the P31.3 billion booked in the comparable period in 2016, which was attributed to the payout of the initial P1,000 across-the-board pension hike.

President Rodrigo R. Duterte approved the release of the P1,000 pension benefit increase in January.

SSS released the amount to its more than two million pensioners last March through three tranches that covered the first three months of the year, resulting to an addition of nearly P7 billion to its net disbursements at end-March.

This caused the pension fund’s net profit to slump by 67% to P4 billion in the first quarter from the P12.3 billion recorded in the same period a year ago. Broken down, P39.547 billion came from members’ contributions while P9.233 billion were from investment and other income.

Following GSIS’ rejection, the SSS chief said they are planning to tap insurance companies who will be willing to cover their liabilities.

“The plan B will be to go private, but my concern will [be] which among our risks are they willing to cover because we have pension, which is the greatest in terms of amount. Every month, we pay out around P9 billion for pension — that can supplant the pension insurance, impairment, endowment. The closest will be annuity because they will get benefit for as long as they are alive,” Mr. Dooc said. “So the risk is very substantial. The issue here is will it be a viable business proposition to the insurer? But if they will cover this, it will be the biggest insurance business. Why? Because we have 35 million members,” he noted.

Mr. Dooc said they have not yet spoken with any insurers as of yet, but noted that they are currently in talks with The Actuarial Society of the Philippines.

“Because the insurance provider should come up with a special product to meet the current benefit cover,” the SSS chief said. “The Actuarial [Society of the Philippines] is currently studying our proposal… their concern is whether the business is viable.” — Janine Marie D. Soliman