President Benigno Aquino III has vetoed the proposed bill providing for an increase in the pension of Social Security System (SSS) members, Malacañang said Thursday.
“According to Executive Secretary Paquito Ochoa, Jr., the President has informed Congress, through the Senate President and Speaker of the House of Representatives, that he has vetoed the enrolled House Bill No. 5842, which provides for a two thousand pesos (P2,000) across-the-board increase in the monthly pension of Social Security System (SSS) pensioners and adjustment of the minimum monthly pension from P1,200 to P3,200, for members who have contributed the equivalent of 10 credited years of service (CYS), and from P2,400 to P4,000, for those with at least 20 CYS,” Communications Secretary Herminio Coloma Jr. said in a statement.
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.
The SSS has 31 million members nationwide.
Quoting the President’s veto message, Coloma said, ‘the President said “…the P2,000 across-the-board pension increase with a corresponding adjustment of the minimum monthly pension will result in substantial negative income for the SSS. More specifically, the proposed pension increase of P2,000.00 per retiree, multiplied by the present number of more than two million pensioners, will result in a total payout of P56 billion annually. Compared against annual investment income of P30 billion – P40 billion, such total payment for pensioners will yield a deficit of P16 billion – P26 billion annually…’”
Aquino added that the passage of the bill would would force the SSS to use the Investment Reserve Fund (IRF) to fund the pension increase. He said this will result in the IRF reaching zero by 2029.
Advocates of the increase said SSS members are no longer able to live by their monthly pensions because of inflation.
