THE Social Security System (SSS) has hired local fund managers to manage P7 billion of its Investment Reserve Fund (IRF) over two years to boost its financial standing, it said in a statement over the weekend.
SSS President and CEO Aurora C. Ignacio said the pension fund allocated the total equally to three Balanced Fund mandates, three Pure Equity Fund mandates, and one Pure Fixed Income Fund mandate.
“The SSS management believes that it can benefit from the investment value-added services of the fund managers such as training, access to proprietary investment analysis and information and access to business analytics,” Ms. Ignacio was quoted as saying in the statement.
SSS deployed P1 billion each to Rizal Commercial Banking Corp., BPI Asset Management and Trust Corp. (BPI AMTC) and ATRAM Trust Corp. under the Balanced Fund mandates.
Meanwhile, the fund managers for the three Pure Equity Fund mandates were BPI AMTC, Metropolitan Bank and Trust Co. and Philequity Management, Inc., also with P1 billion apiece.
BPI AMTC will likewise manage P1 billion under the Pure Fixed Income Fund mandate.
The P7 billion awarded to fund managers is out of the P9-billion investment portfolio the pension fund opened for bidding last year. The total was divided equally among the three investment instruments. According to the bid documents, the firms will manage SSS’ funds for two years.
“The remaining P2 billion allotted for two local fund managers will be opened for rebidding this year,” Ms. Ignacio said.
The SSS is allowed to appoint local or foreign fund managers to manage its IRF.
At end-2018, its reserve fund stood at P495.6 billion, the pension fund said. Bulk or 43% of its investible funds is in government securities, while about 19% is in equities. Another 19% is allocated for loans to SSS members, while 8% is in corporate notes and bonds, 7% in real estate, 3% in bank deposits, and 1% in mutual funds.
In July last year, SSS invested P3 billion of its investment reserve fund in three local mutual funds, divided equally between Philequity Management, Inc., Sun Life of Canada Prosperity Balanced Fund, Inc. and Philippine Stock Index Fund Corp.
The state pension fund is eyeing to finally invest overseas as its new charter allows a bigger chunk of its reserve fund to be parked in foreign-currency securities.
Republic Act No. 11199 or The Social Security Act of 2018 — the amended charter of the Social Security Commission, which is the policy-making body of the SSS — allows the pension fund to put up to 15% of its investible funds in foreign currency and investment-grade instruments.
The funds can be invested overseas, provided that the instruments are listed in bourses and that the issuing company has a proven track record of profitability over the last three years.
The SSS also wants to hire fund managers and advisers for its offshore investments. — RJNI