PRESIDENT Rodrigo Duterte has approved an immediate P1,000 pension increase this month to members of the Social Security System, to be funded with a staggered increase in members’ contributions and salary credits, officials said Tuesday.
To soften the possible impact of the pension increase on the financial viability of the SSS, a two-tiered increase of P1,000 might take effect in 2022 under “conditional implementation.”
“The President seeks to fulfill a social contract with the Filipino people especially the elderly and the poor, to give them their best lives in service,” presidential spokesperson Ernesto Abella said in a press briefing.
Starting this January, an SSS pensioner will be receiving an average of P4,276 per month.
Along with the approved P1,000 pension increase, a corresponding annual 1.5 percent hike in premiums will be implemented by May 2017 from the current 11 percent contribution rate, over a stretch of six years until it reaches 17 percent.
An increase in monthly salary credit to P20,000 will be implemented based from P16,000, Abella said.
SSS Chairman Amado Valdez said that a second tranche of increases will be implemented by 2022, if the SSS gets ‘favorable results’ following a reform of the whole pension system.
“The first P1,000 [will be implemented] this January. We projected the next P1,000 in 2022 but if we are able to implement and get favorable results, maybe it won’t take until 2022, maybe by 2019 we can already comply with the next P1,000,” he added.
The President decided to grant a P2,000 pension increase during Monday’s Cabinet meeting amid immense pressure to keep his election promise.
“Just ensure to me that this is sustainable, and this is an unambiguous instruction here from the President,” Valdez quoted Duterte as saying.
With the pension increase, Valdez said that the actuarial life of the private pension system will be shortened from 2042 to 2040, to be augmented and reformed through increased members’ contribution and an investment reserve fund.
While exercising fiscal responsibility, Abella rejected suggestions by militant lawmakers to use taxpayers’ money to fund pension increase “since the SSS is a private pension fund.”
“The proper perspective is to view SSS as a long-term savings and not as an expense,” he said.
As of October 2016, the SSS had 34.7 million members and total assets of P487 billion. Its liabilities amount to P18.24 billion while its reserves amount to P468.9 billion.
SSS president Emmanuel F. Dooc vowed to improve the collection efficiency of his agency, which has some P13.5 billion in delinquent premiums.
Valdez also said they would look into the pay scale of SSS executives, after the agency came under fire for giving its top officials huge salaries and bonuses.
SSS officials have also urged Congress to pass laws to help the agency improve its collection, including the condonation of penalties to encourage delinquent employers to pay.
“We are asking Congress to expedite the legislated reforms in the SSS giving us the power of condonation to employers… because in some cases, the penalty is higher than the amount owed,” Dooc said.
