SSO eyes stock market investment
SSO eyes stock market investment
The Social Security Organisation (SSO) is considering investing in the stock market as its savings are growing, according to a senior official.
The state-owned body's Finance Department chief, Ms Khampheng Vorasing, said yesterday the management of the organisation was drafting an investment regulation, which would enable the SSO to invest its savings in the Lao stock market.
“We are drafting the regulation and will submit it to the management board to consider and approve before we can put the plan into practice,” she said.
She also said that once the board approves the regulation, the Social Security Organisation would look for other investment opportunities so that it could generate more income to accommodate increasing expenditure.
Ms Khampheng gave an interview to Vientiane Times after the Social Security Organisation unveiled a report last week showing that its savings had reached about 285 billion kip (US$35.6 million) in the first quarter of this year, setting the stage for investment.
The SSO generated total income of about 406 billion kip (US$50.6 million) from 2001 to the first quarter of 2012 while total expenditure was about 119 billion kip over the past decade, leaving 285 billion kip in savings, according to the report.
The report also showed that the number of subscribers has reached 58,000 since the SSO was established in 2001. There is still large potential for the Social Security Organisation to expand its fund as a large number of people still do not have social security.
The government encourages all businesses to subscribe to social security insurance for their staff so they can obtain free healthcare when they fall ill and receive a pension when they retire.
According to the Social Security Organisation, a worker pays 9.5 percent of their monthly salary to the social security fund while their employer contributes 5 percent of their salary.
Ms Khampheng said that so far the SSO has only invested its savings in state-owned commercial banks, and has also purchased government bonds.
She pointed out that while a bank deposit account earned only a low rate of interest, it was very low risk.
She said the SSO management needed to study the stock market carefully before deciding whether to invest, saying it was still a new concept for Laos.
She also said the SSO needed to carefully manage and assess any risk because all of its savings belong to subscribers to the fund.
Ms Khampheng said that despite the risks, the Social Security Organisation would invest some money to ensure the fund would continue to grow, which would benefit those who paid into it.
She said social security funds in other countries typically invest in many areas, including stock markets, hoping to bolster their income
vientiane times
