The Social Security System (SSS) urged Overseas Filipino Workers (OFWs) registered with the SSS to take charge of their personal finances through regular savings, reiterating invitation to join the exclusive Flexi-Fund program for OFWs.
Citing the Philippine Statistics Authority (PSA) 2013 Survey on Overseas Filipinos, SSS Senior Vice President and International Operations Division Head Judy Frances A. See noted that only two in every five OFWs are able to save from their cash remittances.
The PSA survey showed that only 40.7 percent of 1.9 million OFWs who sent remittances had savings from cash remittances, which was 2.2-percent lower than data in 2012.
“Saving should be a priority because once they come back home and their income stops, they would likely have to live off whatever amount they have set aside. It is, therefore, important that they accumulate funds for a reserve, such as their SSS savings to mitigate loss of income.” See said.
Under the regular SSS program, an OFW member can contribute at least P550 based on the P5,000 minimum monthly salary credit (MSC) for OFWs to a maximum of P1,760 per month based on the maximum MSC of P16,000. SSS savings will redound to their benefits in the form of payments for contingencies such as sickness, maternity, disability, retirement and death, according to See.
“Saving even a small amount on a regular basis is a good start. It can soon add up to big gains over the long run especially if put into a safe investment vehicle,” she added.
To help them prepare for the future, the official underlined the exclusive SSS Flexi-fund program for OFW members, a provident fund type of retirement plan that encourages saving while they are employed overseas.
“For only a minimum of P200 paid in excess of the maximum contribution, it already enables an OFW member to save and build up funds that can be used upon retirement to supplement the benefits available under the regular SSS program. Early withdrawal of funds is also allowed in case of urgent cash needs,” she said.
As of September 2014, existing OFW members of the Flexi-fund program reached 39,274 with total equity amounting to P431 million. A paying OFW member has an average Flexi-fund investment of P10,974.
See explained the money put in the Flexi-fund are invested in fixed-income government securities that are risk-free. Interest earnings are guaranteed, as computed based on the average rate of SSS’ short-term peso placements or 91-day Treasury bills, whichever is higher.
The SSS estimates Flexi-fund investments to grow at an average guaranteed interest rate of 1.3 percent this year, while Flexi-fund accounts with annual incentive benefits (AIB) will have a total yield of 3.9 percent.
“With Flexi-fund, OFW members can maximize the return on their savings despite the prevailing low-interest environment. Those who will retain their savings intact within the year will be automatically entitled to annual incentive benefits in the form of additional earnings credited to their Flexi-fund accounts,” See said.
SSS previously reported that Flexi-Fund accounts in 2013 earned a total of P16.4 million at a guaranteed interest rate averaging 2.7 percent. Total earnings comprised of P7.24 million in annual incentive benefits (AIB) and P9.16 million in guaranteed earnings. Flexi Fund accounts with AIB had a total yield of 4.2 percent in 2013.
The highest AIB credited to a member’s Flexi-fund account was P57,098.
“We hope that we can inculcate the saving habit among our members through our regular program and alternative saving options such as the SSS Flexi Fund,” See said.