Social Security System (SSS) President and CEO Michael G. Regino announced that the Commission on Audit (COA) rendered an unmodified opinion on the fairness of presentation of the financial statements of the SSS for the year 2021.
“In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the SSS as of December 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with Philippine Financial Reporting Standards (PFRSs),” COA’s report stated.
This is the second year in a row that the SSS received an unmodified opinion from COA. It is issued when the auditor concludes that the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework.
“We are honored to receive back-to-back unmodified opinions from the COA. This serves as a testament to our continuous pursuit of good governance and transparent and prudent management of the SSS Fund,” Regino said.
Under its financial statements, SSS’ income for 2021 increased by 7.4 percent to P276.33 billion from P257.24 billion in 2020; its benefit payments grew by 14.9 percent to P223.98 billion in 2021 from P194.87 billion in 2020; and its operating expenses for 2021 amounted to P10.19 billion, which is only 33.6 percent of the allowed charter limit.
Since the fiscal year 2020, the SSS used PFRS 4 to present its financial statements, where Social Benefit Liabilities (SBLs) are required to be presented in the balance sheets. For its 2021 financial statements, the SSS recorded an P872.36 billion net change in policy reserves under its expenses representing SBLs, including a Margin for Adverse Deviation (MFAD) that serves as a buffer for conservatism. These, however, are not actual cash that went out of the SSS Fund in 2021 but estimates of the required reserves to fund future benefit claims.
Excluding the said policy reserves, the SSS recognized a net profit of P28.45 billion for 2021.
The SSS also reported that based on its last published actuarial valuation, its fund life is projected to last until 2054.
Furthermore, the SSS reached and exceeded its targets for the said year in terms of sustaining the viability of the social security institution (increase in per capita fund); benefit adequacy (increase in the number of contributors and amount of average monthly salary credit); ensuring progressively higher levels of social security protection for Filipino workers and their families (increase in average pension); institutionalizing a robust ICT system and infrastructure to support transformative digitalization; among others.
“We remain dedicated to improving the lives of our members and their beneficiaries by providing them with meaningful social security protection through a culture of excellence in financial and operational management,” Regino concluded.