The gall of SSS directors

01:52 AM March 15, 2016

THE GALL of Social Security System officials to ask for a P1 million performance bonus after saying that collections are insufficient to grant a P2,000 increase in the pension of retired SSS members. According to SSS commissioner Michael Victor Alimurung, it would be hard to collect from delinquent payers because most of them are from the informal sector.

“Collection efficiency is not the solution because 75 percent of our members are from the informal sector. Those people have no capacity to sustain payments every month,” Alimurung said. What then is the SSS officials’ performance that should merit the fabulous bonus?


SSS president Emilio de Quiros Jr. asked rhetorically: “Would you place your money in a bank with a reserve fund of P440 billion if you knew that its officials are not compensated fairly?” The question is most inappropriate because the analogy with a bank is terribly flawed.

While a bank and the SSS are both depositories of enormous amounts of money, a bank generates the deposits out of the voluntary placement of money by a large number of individuals and entities, and the SSS builds its fund out of the mandatory payroll contributions of both employees and employers.


A bank attracts depositors by rendering quality financial services. These services are born of the bank officers’ ingenuity, effort, efficiency and deep understanding of the needs of the target clientele. Contributors to the SSS pension fund are decreed by law. All the SSS has to do is collect those contributions.

As the goal of a bank is to generate substantial returns on its stakeholders’ capital, its governing body, the board of directors, is usually composed of persons with extensive experience in entrepreneurship and business management and with sterling academic records in any of these disciplines: economics, business, accounting or law—records established in prestigious universities. A depositor does not know if those directors are compensated fairly or not.

As the basic function of the SSS is to collect contributions from employees and their employers, its officer corps, except for the president, only needs to be made up of good administrators. The law that created the SSS seems to take cognizance of that.

The law provides that the board of directors be composed of the labor secretary, the SSS president, and seven appointive members, three of whom shall represent the workers’ group, three the employers’ group, and one the general public. The chair is designated by the president of the Philippines from among its members.

The members of the SSS board are Labor Secretary Rosalinda Baldoz, Bienvenido Laguesma, Daniel Edralin, Ibarra Malonzo, Eva Arcos, Juan Santos, Diana Pardo-Aguilar, Alimurung and De Quiros.

The general conduct of the operations and management functions of the SSS is vested in its president, who serves as the chief executive officer responsible for carrying out the program of the SSS and the policies of the board. He or she should have had previous experience in the technical and administrative fields related to the purposes of the SSS.

SSS president De Quiros has over 30 years of banking and finance experience. He was executive vice president at Bank of the Philippine Islands and was at one time treasurer of Far East Bank. Santos, the chair designated by President Aquino, spent most of his working life with Nestlé Philippines, retiring as its chair, CEO and president in 2003. He was the trade secretary of President Gloria Arroyo.


Laguesma was President Joseph Estrada’s labor secretary. Edralin, Malonzo and Arcos are trade union career officers. They should be well-versed in the collection of membership dues, on which trade unions thrive.

Pardo-Aguilar is the daughter of Jose Pardo of the 7-Eleven and Wendy’s Hamburger chains, and is known to have been a large contributor to the campaign fund of then presidential candidate Noynoy Aquino in 2010. As she put in years in the family’s chains of franchise stores, she must have gained extensive experience in collecting royalties, the lifeblood of franchise systems.

Alimurung used to provide general management and strategy consulting to Philippine government agencies. That does not indicate substantial experience in administrative work.

Based on feedback from pensioners, the SSS has failed in its avowed mission to provide meaningful protection to members and their beneficiaries. The SSS says it is unable to increase the pension of retirees because 33 million members pay an average of P1,100 per month as against the P3,200 average pension of 2.15 million retirees and their dependents. And of the 33 million members, only 12 million are “actively paying” members.

If collection efficiency is not the solution, as Alimurung has said, what strategy has he, who has an MBA degree from Stanford University and who used to provide strategy consulting to government agencies, proposed and implemented? What solutions has Santos, the SSS chair, who was named Management Man of the Year by the Management Association of the Philippines in 1994, offered to correct the lopsided situation?

What new policies have the other directors, who should be experts in collection of dues or royalties, set to narrow the gap between revenue and pension payment? What have the SSS board members done the past year for them to deserve a performance bonus?

Oscar P. Lagman Jr. is a retired entrepreneur, corporate executive, business consultant, MBA professor, and an uncomplaining SSS pensioner.

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TAGS: Commentary, opinion, pension, pensioner, Social Security System, SSS
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