P1,000 hike in SSS pension approved
Social Security System Chair Amado Valdez
Finally, the 2.2 million retired members of the Social Security System (SSS) will start receiving additional P1,000 in their monthly pension starting this January at the earliest.
President Duterte on Tuesday approved the across-the-board increase in the monthly pension of SSS retirees in what Malacañang described as a realization of his “social contract with the Filipino people.”
The pension raise, however, was made on the condition that the SSS would raise by 1.5 percentage points the monthly premiums of active members. This would increase their monthly contributions to 12.5 percent of their monthly salary credit. The higher monthly premiums will start in May.
The President also ordered the increase in maximum monthly salary credit from P16,000 to P20,000 on which the monthly premium is based.
Second P1,000 increase
At a press briefing, SSS Chair Amado Valdez said a pension increase of another P1,000 could come in 2022 or earlier, in 2019.
The pension hike signaled the defeat of the proposal of Mr. Duterte’s economic managers to grant the increase only after the approval of the tax reform law that would make it easier to increase members’ contribution to the fund.
Last month, the finance, budget and socioeconomic planning secretaries warned that without an increase in members’ and employers’ contributions, the P2,000 increase would cut the actuarial life of the pension fund by 14 to 17 years.
They said the SSS would have to shell out an additional P32 billion annually to cover the initial P1,000 increase and P62 billion for the entire P2,000 increase in monthly payments.
The President’s spokesperson, Ernesto Abella, said Mr. Duterte approved the pension increase “while exercising fiscal responsibility to ensure the economic sustainability” of the private pension fund.
“As the President has emphasized, he is the President of an entire nation and not just a particular social class,” Abella read from a prepared statement.
Long-term savings
“The proper perspective is to view SSS as a long-term savings and not as an expense. Actively paying SSS members, after all, enjoy benefits, specifically six benefits and loan privileges,” he added.
Abella said the SSS leadership would implement legal measures to improve its collection efficiency and ensure the financial viability of the pension fund.
“The President is not amenable to using taxpayer money to fund the pension increase since the SSS is a private pension fund. Its total assets are P487 billion as of October 2016 and its fund life is until 2042,” he said.
“Even with the P1,000 increase, the fund life will continue until 2040 by May 2017 when the contribution rate and increase in monthly salary credit are implemented,” he said.
Agriculture Secretary Manny Piñol said there was a “long and intense” discussion in Malacañang on Monday night on the proposed pension increase.
Lines were drawn between economic managers who questioned the pension increase and secretaries identified with progressive groups, he said.
Among those who pushed for the pension increase at the meeting were Social Welfare Secretary Judy Taguiwalo, Agrarian Reform Secretary Rafael Mariano and National Anti-Poverty Commission Secretary Liza Maza.
In a paper presented at the Cabinet meeting, the three secretaries described as “unfounded” the insistence of finance officials that the state-run SSS would go bankrupt if Mr. Duterte raised the pension of SSS members.
They blamed past SSS officials for poor fund management and reminded the President of his campaign promise to give SSS pensioners an additional P2,000 a month.
Delinquent employers
“In the end, President Duterte decided to fulfill his commitment of additional pension for the retirees but only after reforms to ensure the viability of the SSS have been implemented,” Piñol said in a post on Facebook.
On the delinquent employers, he quoted the President as ordering the filing of charges against them and their arrest.
Mr. Duterte, he said, learned from a briefing with SSS Chair Valdez that only 40 percent of the 33 million SSS members were paying their premiums.
As for the supposedly excessive allowances and honorariums of SSS officials, Piñol said measures would be undertaken to streamline and ensure the viability of the agency.
The SSS president, Emmanuel Dooc, on Tuesday said the pension fund for workers in the private sector would step up efforts to collect contributions from employers and improve investment of its funds.
Dooc said the SSS would also seek more powers from Congress to be able to condone penalties to widen the contribution base and ask for an executive order from Mr. Duterte to require an SSS certification from companies that would do business with the government.
In the coming days, cases will be filed against erring employers who do not submit contributions, while those who ignore summonses will be cited in contempt, according to Valdez.
To improve SSS investments, Valdez said the agency was planning to fund the construction of toll roads. —WITH A REPORT FROM DONA Z. PAZZIBUGAN
