Social Security Investment Fund's assets reach JD9.565m by end of February

AMMAN — The Social Security Investment Fund's (SSIF) performance has been “positive”, with total assets reaching JD9,565.3 million as of February 28, compared to JD9,237.9 million by the end of 2017, marking a 3.5 per cent increase in the first two months of 2018, SSIF executive chairperson Suhair Al-Ali said. 

Moreover, assets increased by JD1,035.1 million during the period from February 28, 2017, and February 28, 2018, representing an increase of 12 per cent, a statement by the SSIF quoted Al-Ali as saying.

She added that the assets grew by JD8 billion since the fund’s establishment in 2003 to reach JD9.6 billion. The increase came equally from two components: the fund’s income and the Social Security Corporation contributors’ subscriptions.

According to the chairperson, the comprehensive income has been edging up over the first two months of 2018 compared to the same period of last year,‎ registering JD222.3 million as of February 28, compared to JD102.7 million as of February 28, 2017. This marked an increase of 116.5 per cent, the statement read.

Comprehensive income consists of the income generated from the return on investment in the fund’s various investments in money market instruments, bonds, loans, financial leases, public and private equity, real estate and dividends, in addition to the revaluation of the fund's strategic equity portfolio, according to Al-Ali, who noted that income from the aforementioned sources, excluding the revaluation, amounted to JD60 million as of February 28, 2018, compared to JD43.3 million the previous year, marking a 38.6 per cent increase.

The SSIF chief explained that her agency, like other pension funds, invests in investment tools within acceptable risk levels. 

Therefore, the SSIF builds the strategic asset allocation that takes into consideration the parameters of the national economy and revisits the asset allocation periodically in light of the actuarial studies of the SSC that take place every 3 years. 

As for the fund’s investment in treasury bonds, which currently constitute 52% of the fund’s portfolio, Al-Ali said that in general it is common practice for pension funds to invest in treasury bonds as they are a safe investment tool with a fixed income stream. According to international accounting principles, Basel III, the credit risk in such investments is zero. 

This is also confirmed by the Central Bank of Jordan (CBJ) regulatory capital instructions issued on October 31, 2016, based on Basel III rules. Because of this zero risk weighting, there is strong interest by SSIF and the banking sector to invest in treasury bonds as demonstrated by the strong coverage ratio of these bonds by SSIF and the banking sector. 

She said that the coverage ratio of the latest issue of treasury bonds that was issued by CBJ on April 22, 2018, was 302 per cent, “which reflects the extremely high demand for such safe investment tools”. 

The chairperson highlighted the main investments that the fund is undertaking “to support national efforts aimed at enhancing the growth of the national economy and to create jobs.” She stressed that the fund’s investment decisions are taken based on clear and transparent guidelines and are based purely on investment criteria. 

For example, the fund also invests directly in the energy sector through acquisitions in Jordan Electricity Company and Central Electricity Generating Company and indirectly through its investment arms in Kingdom Electricity Company, Electricity Distribution Company, Irbid District Electricity Company and in a number of renewable energy projects. The total value of the fund’s investments in the traditional and renewable energy sectors amounted to JD 92 million, according to the statement. 

Al-Ali stressed that the fund follows the best international disclosure practices as it publishes its financial reports quarterly and makes financial statements available through periodic press statements. Annual reports can be found on the fund’s website at
www.ssif.gov.jo.