The opposition to President Noy Aquino’s decision to veto the Congress-passed bill mandating a P2,000-increase in Social Security System retirees’ monthly pension payment came mainly from two sources.
One source—the more weighty source—of opposition was the large body of people, from within and outside the ranks of the retirees, who questioned the validity and accuracy of SSS management’s actuarial estimates of the SSS fund’s solvent status if the P2,000 increase were signed into law. The estimates indicate the SSS will not be able to fulfill its statutory responsibilities—pay retirees’ pensions and provide non-pension benefits to active SSS members—after 2029. The critics of the Presidential veto dispute SSS management’s actuarial calculations, citing both technical and non-technical factors.
The second source of opposition to the Presidential veto was the equally large number of people—mostly SSS members and retirees—who questioned and expressed resentment over the magnitudes of the management salaries and of the bonuses paid by SSS to the members of its board of directors. As reported by the media, each board member, including the Secretary of Labor and Employment, took home in 2015 at least P1 million in bonuses, presumably on top of the regular fees for attendance at board meetings.
The critics of the very generous management salaries and directors’ bonuses believe that the SSS has no compelling need to pay them. The usual defense of supporters of the idea of generously remunerating the SSS’ top officers and board members is that the said individuals need to be enticed to serve the government, otherwise they will stay in the private sector, which typically is more generous with executive and director emoluments. Why, they ask, is it necessary to entice individuals to become executives and directors of SSS and the other GFI (Government Service Insurance System, Land Bank of the Philippines, Development Bank of the Philippines and Home Development Mutual Fund)? Why, indeed?
I have long questioned the rationale for enticing individuals with high remuneration in order to get them to join the ranks of key executives and board members of SSS and the other GFIs. I am questioning it anew in light of the controversy created by President Aquino’s negative action. I believe that the time has come to address the said rationale with a view to determining whether it is justified under all the relevant circumstances.
I believe that the longstanding entice-them policy is not justified and that the time has come to set it aside. These are my reasons.
My first reason comes in the form of a question. Is running SSS or GSIS or HMDF (Pag-IBIG) really such an enormous task requiring a set of super-duper managerial or banking skills? I don’t think so. By the very nature of their operations, these institutions have funds flowing into their treasuries from employers’ and members’ compulsory contributions and their managements don’t have to undergo their private-sector counterparts’ stressful money-raising chores. They need to be remunerated handsomely for making, like their private-sector counterparts, investments of the billions of pesos contributed by the government and employees? I think not. If a professional has had adequate financial training, investing funds does not require rocket-science-type knowledge.
My second reason for being unconvinced about the concept of financially enticing individuals to work for a GFI is that the individuals who currently sit in the GFI president’s and directors’ chairs do not belong to a class of super-duper financial craftsmen without whose services the GFIs would not function effectively. Every year the financial and business administration departments of Philippine universities and colleges turn out thousands of graduates raring for the opportunity to put their acquired skills to the test. Some graduates are admittedly smarter than others; the government’s task is to select the best of the bunches.
My third reason for questioning the soundness of the entice-them policy is that in many instances there is no absolute certainty that the enticed individuals would receive the fat remuneration packages that their backers insist they would have received in some investment house or corporate entity. Oftentimes the claimed missed opportunities were in the nature of press/praise releases.
Finally—and this should be a very potent reason—we are talking here about working for the government. That means working for the nation. A dedicated professional should be prepared to do his/her share of nation-building. He or she should expect no more than market salary and directorial-fee rates for working for a GFI. None of the bovine ordure about having to incur a financial sacrifice for serving SSS or GSIS.
The active members and retirees of the SSS are utilizing the fat-pay issue as a weapon to attack a sound Presidential decision. The weapon should be removed from their hands.
E-mail: rudyromero777@yahoo.com