That P2,000 pension increase proposal of Rep. Neri Colmenares—which was heartlessly vetoed by PNoy last Jan. 12—is turning out to be the best initiative that is jump-starting the long-awaited reform of our national social security program.
Suddenly, every Filipino is talking about pensions.
More than before, pensioners and ordinary folks are shaping the future of our social security by aggressively voicing their demands for adequate pensions via the mass media.
Undeniably, the program—once the centerpiece of President Ramon Magsaysay’s government of the people, by the people, and for the people—has been trivialized under the administration of the Social Security System.
PNoy’s veto with his simplistic justification that the P2,000 pension increase would bankrupt SSS clearly illustrated his superficial understanding of the program and exposed his apathy and that of his loyal army of “Daang Matuwid” officials toward the 2.1 million SSS pensioners.
Of course, any simpleton could also conclude so if the fund’s underachieving administrator would do nothing to increase contributions and other revenues.
In fact, anyone could increase effortlessly the fund’s actuarial life by doing nothing, watching lazily as the natural growth in wages drives up contributions.
But the real mission of SSS—its reason for being—is to provide adequate pensions, and a mission-driven fund manager would have raised contributions to support what Rep. Colmenares has proposed six years ago.
Who says that SSS needs congressional action to increase pensions? It is authorized by law to do so and if necessary, to even increase contributions.
But in an election year, it knows that PNoy, the workers and their employers would reject any contribution increase.
Thus, Rep. Colmenares had to convince almost single-handedly both houses of congress to consider his bill. Finally after six years, it was approved and transmitted for approval to PNoy.
But it only rested in PNoy’s lap for 30 days until the day before it would lapse into law.
Reminded to sign it, he must have heartlessly vetoed it while smiling as usual, developing his bankruptcy theory, and refreshing his mind about the massacre that happened at Mamasapano about a year ago.
That veto has triggered national debates on what our pension program should be. Hopefully, they would lead us serendipitously into adopting fair and equitable pension reforms, the last of which were made in 1997 during the administration of President Fidel Ramos.
Meantime, these debates are narrowly centered on the veto’s immediate political consequences.
Would it lose votes for Liberal Party standard-bearer Mar Roxas and establish PNoy as an unpopular but responsible leader who chose the straight path? Which is more expedient—making pensioners happy while driving SSS to bankruptcy or fueling their anger while protecting the fund’s actuarial life?
In fact, these squabbles only distract us from tackling real pension issues.
Do we like our present pension system for private sector workers?
Of course, we don’t.
We should no longer settle for the P1,000 pension increase that PNoy’s political allies are offering as palliative or even for the proposed P2,000.
Instead, we should now demand for a pension scheme that replaces at least 60 percent of our last salary.
But tit for tat, we must swallow the bitter pill.
Workers should start contributing 7.37 percent of their entire salary to SSS, unlike now when they only contribute 3.63 percent of monthly salary that is capped at P16,000.
This means that they must take a cut in their present take-home pay in exchange for a decent amount of pension at retirement, early death or disability.
Private-sector employers, on the other hand, must start contributing their share based on full salary at the same rate of 7.37 percent.
All summed up, the SSS contribution would henceforth total 14.74 percent of the entire salary. This is still notably lower than the 21 percent that public sector workers and employers now contribute to the Government Service Insurance System.
Do you still wonder why Mrs. Concepcion—our favorite public high school teacher who retired after 40 years of teaching on a final salary of P30,000—is now receiving a P27,000 monthly pension from GSIS?
In contrast, if Ma’am taught in a private school, she would be getting from SSS only P13,100. This is less than half of her GSIS pension.
There are other major pension issues.
Why are workers of the private and public sectors covered by separate pension programs with unequal contribution and benefit systems?
Are private-sector workers really better compensated than their public sector counterparts? Not so. With their superior GSIS pensions—that are obviously tax-free deferred compensation—public servants are definitely better compensated in the long haul.
A caring and forceful president could have implemented immediately the above contribution and benefit reforms, but a more prudent leader would do so in phases, even in 10 years.
Convinced of the president’s good intentions, every stakeholder—worker or employer—would support him in establishing this kind of pension program that we once thought we’d have when we passed our Social Security Act of 1954.