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House allies defend Aquino from backlash over pension hike veto

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House allies defend Aquino from backlash over pension hike veto

Solon: Increase in pension without hike in premiums will bankrupt SSS
/ 08:24 PM January 14, 2016

Allies defended President Benigno Aquino III from the backlash he received after he vetoed the proposed law increasing the monthly pension in the Social Security System (SSS).

Speaker Feliciano Belmonte Jr. said the President vetoed the bill because the Senate failed to pass a sister bill approved by the House giving the SSS board powers similar to that of the Government Service Insurance System (GSIS) in increasing premiums.

“He had no choice as SSS could not afford it from an actuarial point of view. The House passed a sister bill giving the SSS board powers similar to that of the GSIS Board to increase premiums, but it was not yet approved by the Senate,” Belmonte said.

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The Speaker said Aquino only chose to be “fiscally responsible,” instead of being “driven by current politics.”

Majority floor leader Neptali Gonzales II also defended Aquino, saying an increase in pension without an increase in premiums would bankrupt the SSS.

“I think it has something to do with the fact that without the counterpart bill, authorizing the SSS board to increase contributions, which the House approved on third reading but the Senate failed to act on, SSS will be bankrupt in about 15 years … Please be informed that when we approved the bill that increased the pension benefits by P2,000, we likewise approved an accompanying bill that authorized the SSS board to increase the premium of its members. This is very important to prevent the SSS from being bankrupt as a result of the pension increase,” Gonzales said.

Gonzales said the President only chose not to play politics.

“The Senate approved the pension increase, it failed to approve the accompanying bill. This the President opted not to play politics and instead was forced to veto the bill to prevent the SSS from being bankrupt,” Gonzales said.

Aquino vetoed the law transmitted to the Office of the President which would have increased the monthly pension by P2,000 across the board, making it P3,200 from P1,200 for those with 10 credited years of service, and P4,000 from P2,400 for those with 20 years.

READ: Aquino vetoes increase in SSS pension

Communications Secretary Sonny Coloma said Aquino was worried that the “stability of the entire SSS benefit system” would be “seriously compromised” in favor of two million pensioners and their dependents.

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This is because the proposed increase would result in a negative income for the SSS, Aquino said.

READ: Palace defends Aquino’s veto in SSS pension

Aquino added that the passage of the bill would force the SSS to use the Investment Reserve Fund (IRF) to fund the pension increase. He said this would result in the IRF reaching zero by 2029.

Aquino had also thumbed down the proposal to lower personal income and corporate tax, citing a hole in the revenue stream.

Bayan Muna Rep. Neri Colmenares, the author of the bill in the House, had criticized Aquino for being heartless in shooting down the proposed pension hike. RC

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TAGS: Benigno Aquino III, pension increase, Social Security System
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