MANILA, Philippines — A Senate panel has approved a proposal that would grant the President authority to defer the contribution rate hike of state-run pension fund Social Security System (SSS).
During a hearing on Tuesday, the Senate Committee on Government Corporations and Public Enterprises tackled three bills either seeking to postpone the SSS contribution hike scheduled for 2021 or to give the President the power to do so.
SSS President president and chief executive officer Aurora Ignacio opposed the proposed deferment.
“At the outset, we’d like to state that the bills proposed will tend to imperil probably on a permanent or a temporary basis the sustained benefits of the members and the benefits that’s supposed to go to the members,” Ignacio told senators.
READ: SSS sees P41-B loss in contributions if rate hike delayed
“Currently, the long-term solvency is already threatened with trillions of unfunded liability. In simple terms, there is insufficient funds to enable us to support payment for the next generation of pensioners,” she added.
Furthermore, she said the new SSS contribution hike was a “long overdue reform” since the agency has increased its pension benefits 25 times while it has only so far adjusted its contribution rate only eight times.
After Ignacio made the appeal, Senator Richard Gordon, chair of the committee, said the President should still be given authority to make a decision on the matter.
Under one of the Senate bills being tackled, the President will be allowed to defer the contribution hike during times of national emergency or calamity for a period not exceeding six months.
“Kailangan rin naman bigyan natin ng puwang ang presidente dahil kung nakikita niya na yung natitirang nagbabayad [ng contribution], siya na rin ang magde-decide kung isu-suspend ‘yon,” Gordon pointed out.
“We’re giving respect to the SSS so that they can lobby to the President and make their appeal thereat,” he also said.
Ignacio said this was a “better” proposition but proposed that the deferment of the contribution increase be shortened to three months.
Gordon said it would be up to the President to decide on how long the postponement will be.
“It’s a very flexible six months,” he said.
Meanwhile, Jose Kato, director of the legal and legislative cluster of the Joint Manning Group, Inc. suggested that different sectors also be allowed consultation with the President.
“I think that it’s common consensus that we’ll give a free hand to the President, would it also be possible—since the SSS will also have the chance to lobby its own interest—can the different sectors directly give an opinion directly to the President in as much as perhaps there are sectors that are hurting more than the others,” Kato said.
“Because we are talking of a blanket suspension or a blanket non-suspension, maybe, perhaps, to be fair also, some sectors should be consulted separately depending on their situation,” he added.
In response, Gordon said the committee could add to the proposal that the decision on whether to defer the contribution hike would be “upon consultation with the SSS and the other sectors of the economy who may be affected. Some more severely and some less.”
“We can add that,” the senator said.