The Makabayan bloc in Congress warned against the possible legal issues on the approval by President Rodrigo Duterte of the P1,000 pension hike for the members of the Social Security System (SSS).
In a press conference on Wednesday, Bayan Muna Rep. Carlos Zarate expressed gratitude to the president for approving the pension hike, but warned against the legalities of the move to fund the hike by increasing the contribution as well.
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Malacañang on Tuesday announced the approval of the P1,000 increase in the state pension fund starting this month, but there will also be a corresponding 1.5-percent contribution rate hike in May 2017 and an increase in monthly salary credit to P20,000 based from P16,000.
This would put the contribution rate from the current 11 percent to 12.5 percent, which could go up to 17 percent over the next six years.
Zarate said this legal issue will have to be addressed by reading the fine print of the approved pension hike.
“Gusto natin makita ang fine print ng resolution na nilagdaan ng SSS Board. Malinaw naman talaga sa charter ng SSS, nakasaad dun.. na pag mayroong pagtaas ng pension, dapat hindi kukunin sa pagtaas ng premium,” Zarate said.
(We want to see the fine print of the resolution signed by the SSS Board. It’s clear in the SSS charter that in cases of increase in pension, this should not be funded from increase in premium.)
READ: Duterte OKs P1,000 SSS pension hike
According to Section 4 of the Social Security Act, any increase in benefits “shall not require any increase in the rate of contribution.”
Zarate warned against the pending contribution hike in May to finance the pension hike, saying that the SSS should focus instead on instituting reforms, such as improving the collection of revenue and expanding its membership base.
Zarate said the prohibition in the charter on funding the pension hike from the increase in contribution would pose a legal problem that could go all the way to the Supreme Court.
“That’s a legal question kaya gusto natin makita ang fine print. Malinaw na nakasaad sa batas na hindi pwedeng ganun ang proseso,” Zarate said.
(That’s a legal question that’s why we want to see the fine print. It’s clear in the law that that process is not allowed.)
Zarate said the grant of the pension hike is the result of the collective struggle of the people. He warned that it is not the time to increase the contribution
“Hindi tayo natutuwa na kailangang magdagdag ng kontribusyon.. Kami sa Makabayan, naniniwala na hindi panahon ng dagdag kontribusyon ngayon,” Zarate said.
(We are not pleased with the need to increase the contribution. We in the Makabayan bloc believe that it is not the time to increase the contribution.)
READ: P1,000 hike in SSS pension approved
SSS chair Amado Valdez had said the second P1,000 increase would take effect in 2022 or even as early as 2019 “subject to conditionalities.”
Duterte’s economic managers earlier opposed the hike as it would cut the actuarial life of the pension fund by 14 to 17 years.
But Malacañang said with the P1,000 increase, the fund life will continue until 2040 by May 2017 or by the time the contribution rate and increase in monthly salary credit shall have been implemented.
Duterte made it his campaign promise to push for a pension hike for retirees and senior citizens.
READ: Duterte vows to hike SSS pension
During the 16th Congress or before the end of his term, former president Benigno Aquino III vetoed the approved bill increasing the pension by P2,000 because the proposal would bankrupt the state pension fund.
READ: Aquino vetoes increase in SSS pension
Aquino then said the P2,000 across-the-board pension hike for all 2.1 million pensioners would cost the SSS some P56 billion even though it only earns an annual investment income of P30 billion.
The proposed law would have increased the monthly pension by P2,000 across-the-board–to P3,200 from P1,200 for those with 10 credited years of service, and to P4,000 from P2,400 for those with 20 years. CDG