Exporters buck SSS pension hike

THE country’s biggest group of exporters, which employs hundreds of thousands of workers, opposes the plan to increase monthly contributions to the Social Security System.

“The national government is duty-bound to step in and pay the increase in benefits of members if the SSS cannot afford to shoulder the expenses,” said Sergio Ortiz-Luis, president of the Philippine Exporters Confederation Inc. (Philexport).

Under the existing setup, SSS members pay 11 percent of their monthly salary as premiums, with employers covering 7.37 percent and employees, 3.63 percent.

To cover a P1,000 increase in monthly pensions granted by President Rodrigo Duterte, the SSS wants to increase premiums by 1.5 percent every year until it reaches 17 percent of a member’s compensation, to be shared by the employer and the employee. 

President Rodrigo Duterte

But Ortiz-Luis said the government should first review its figures to consider the impact of increased premiums on members and their employers.

He also called for more transparency in how the SSS invests its funds, and why it has not been getting the needed returns to cover members’ benefits.

The state-run SSS said Wednesday it its confident it can grant another P1,000 across-the-board pension increase by 2022 or even earlier.

SSS president Emmanuel Dooc said that assuming the rate of members’ contributions is increased as planned, the life of the fund can even be extended from the present 26 years to 29 years, with the base year being 2022.

He said this did not even take into account an improvement in the agency’s collection efficiency. 

On Tuesday, Duterte approved an immediate P1,000 increase in monthly SSS pensions for retirees, which was half of the P2,000 hike he promised when he ran for president.

Cabinet officials say the second half of the promised increase would come in five years, or 2022.

Economic Planning Secretary Ernesto Pernia said the increase in members’ contributions would begin in May, after the passage of the Finance Department’s tax reform proposal.

Pernia said the increase in contributions would not be inflationary.

For employees, he said, the increase would not be even 1 percent.

Budget Secretary Benjamin Diokno said the second tranche of the pension increase, targeted for 2022, will depend on the performance of the SSS.

“It will be up to them whether they can effect the increase,” Diokno said, noting that the SSS will have to exert great effort to reform the system.

“For example, the delinquent employers, they should run after them. Also, they should also look into the exorbitant allowances of GOCC officials,” Diokno said, referring to the high bonuses being given to top SSS officials and board members.

Diokno said the economic managers and the leftists in the Cabinet had a “healthy and lively” discussion about what to do about the President’s promised P2,000 increase in pensions.

Other Cabinet sources said the discussions were “long and intense,” with a sharp divide between Duterte’s economic managers and leftist secretaries.

Among the contentious issues was a proposal that the state shoulder the expense of the pension hike.

“Our point is, we really should not use taxpayers’ money because there are many things that should be prioritized. We are trying to solve the problems of 2.4 million Filipinos,” Diokno said. 

Economic managers had earlier opposed the pension hike, saying it would shorten the life of the SSS.

The two sides found common ground in granting the initial P1,000 increase.

“There is a need to adjust [pensions],” Diokno said. “What the elderly are receiving is not enough.”

In the same Cabinet meeting, Duterte ordered the arrest and prosecution of employers who do not remit the SSS contributions of their workers.

The President said reforms in the SSS will have to be implemented so he could fulfill his commitment of giving retirees additional pension funds.

Senate President Pro-Tempore Franklin Drilon said the plan to raise monthly contributions to fund pension increases was illegal.

“The SSS is not allowed to raise the premium rates so it can increase benefits,” he said, noting that Republic Act No. 8282 specifically prohibits the SSS from recommending an increase in benefits that would require an increase in contributions.

“The increase in benefits of our pensioners must not come from a similar increase in the burden shouldered by current SSS contributors. The law is crystal clear in that regard,” Drilon said.

Drilon said an increase in benefits can only come from “the actuarial soundness of the reserve fund” without requiring any increase in the rate contribution.

Senator Francis Escudero said SSS officials must justify the imposition of additional premiums on 34 million SSS members starting in May.

He said they should also be able to show to its members appropriate documents where their contributions went and the expenses incurred by agency. 

Senators Richard Gordon and Juan Edgardo Angara, on the other hand, said the increase in premiums was necessary.

Angara said the SSS would be financially drained if it raised pensions without also increasing member contributions.

House of Representatives members welcomed the P1,000 increase in pensions.

“The grant of P1,000 hike to SSS pensioners has long been overdue,” said Rep. Rodolfo Albano III of Isabela.

Reps. Ben Evardone of Eastern Samar, Carlos Zarate of Bayan Muna party-list, Ariel Casilao of Bayan Muna party-list, and Alfredo Garbin of Ako Bicol party-list said President Duterte “decided morally” to heed the calls of SSS pensioners.

But Rep. Gary Alejano of Magdalo party-list, a member of the opposition, said that while the pension hike was welcome, it put an additional burden on present SSS members with higher premiums.

“This is an issue of delivering to a promise at the expense of others. In this case the current contributors,” Alejano said.

Zarate, for his part, thanked President Duterte, the House leadership led by Speaker Pantaleon Alvarez and the new SSS Board led by chairman Amado Valdez for heeding the voice of the people in granting the long awaited hike in the pension. 

“We know that the P2000 hike is still very minimal for the required decent and livable pension. Yet, we hope that this would help our pensioners to somehow alleviate their hardships. Bayan Muna will continue to push for more reforms and for the earlier implementation of the second P1,000 tranche of the increase,” Zarate, one of the principal authors of the proposed SSS pension hike, said.

The labor group Associated Labor Unions (ALU) welcomed President Duterte’s order to increase by P1,000 the pension for 2.3 million pensioners.

However, the ALU argued that the government should have fixed the system first and institute reforms within SSS before requiring new contributions from 14 million paying members out of the 34 million registered members.

Tanjusay urged SSS management to institute reforms within the system by trimming excessive bonuses and introducing reasonable perks to all its top executives, improve its collection efficiency by pinning down non-remitting employers, stop corruption within and act on 7,000 delinquent employers now pending in the courts. With Vito Barcelo

Topics: President Rodrigo Duterte , Social Security System , SSS pension hike , SSS pensioners , Sergio Ortiz-Luis , Philippine Exporters Confederation Inc. (Philexport)
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