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Saturday, April 20, 2024

Right to understand our pension system

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When President Rodrigo Duterte assumed the presidency last June 30, he also signed his first executive order which consolidated 12 anti-poverty agencies under his Cabinet Secretary to make their programs more effective and responsive to the needs of our poor.

We thought that he would immediately follow it up with a flurry of executive orders on social protection and pensions.

But he didn’t. Yet, we weren’t disappointed even if he signed his second EO only after 23 days because it was about our long-sought freedom of information. Neither were we unhappy that it applied only to agencies of the executive branch.

The EO operationalized henceforth our right to obtain any records, documents, papers, reports, letters, contracts, minutes and transcripts of official meetings of these government agencies.

It should trigger the enactment soon of an equivalent FOI law for all three branches of government. And a determined Congress could simply pass the bill that Senator Grace Poe had already sponsored during PNoy’s presidency.

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The EO is in pursuant of Section 28, Article II of our 1987 Constitution. In fact, all FOI regulations are also anchored on Article 19 of the United Nation’s Universal Declaration of Human Rights that the Philippines had adopted 68 years ago on Dec. 10, 1948:

“Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.”

But we may still have to wait for another 120 days before the EO could be implemented in any of the executive agencies, which it mandated to formulate their own People’s FOI Manual.

We realize, of course, that President Digong’s real object in issuing the EO is to achieve a clean government where all public transactions are free from any graft and corruption. To attain this, he is making sure that such transactions are transparent and open to the public.

For us, pensioners and senior citizens, the EO would not simply satisfy our curiosity for trivial information or quench our thirst for useless data.

We would use it to deepen our understanding of how and why our pension system developed and became ineffective and irrelevant. We could then use it as a means to elevate social protection into playing a central role in our society, as what it does in most countries worldwide.

Specifically, we would invoke the EO in asking officials of the Social Security System, the Government Service Insurance System, and PhilHealth about a number of vital information about their programs.

How much pensions and other benefits should they provide?  How much were they in the past, and how much would they be at the end of President Digong’s administration in 2022?

If SSS pensions could not be increased today, would they ever be increased in the future? Is increasing the contribution rate the only way to increase them?

How should these programs be financed—from contributions alone, or together with government subsidies?

Should our social protection programs be funded on a pay-as-you-go basis, where contributions are raised just enough and only in time to settle current obligations?

Or, should they be fully funded from the very start? If so, why were unfunded liabilities not settled by government?

How much of the funding should come from investment income? During the time of President Ferdinand Marcos and Administrator Bert Teodoro, it was illegal to invest the SSS funds in private stocks and loans to corporations. Why was this bad?

But beginning in 1987, President Cory Aquino and Administrator Joey Cuisia reversed this investment policy. Has this given SSS better returns?

Should they have a perpetual life with an unfunded liability of zero? From which document or book is this funding principle anchored?

How are these programs financed in other countries?

The American social security program is a well-known model of a pay-as-you-go system. It is presently funded from a contribution rate of 12.9 percent of salary, and derives investment income only from government securities. Unlike our SSS, it doesn’t lend salary loans nor does it invest in the stock market.

And as reported by its Board of Trustees on June 22, its retirement trust funds are projected to be depleted in 2034.

In other words, it now has an actuarial life of only 18 years.

The information that we seek may not be available in these agencies. After all, they are not the usual that have been asked, documented or published.

For instance, if indeed GSIS does not regularly keep track of the amounts of its average pensions, how could it readily make public these amounts during the past ten years?

Naturally, officials have no choice but to decline to give us the documents that they don’t have, such as their actuarial valuation and 2015 annual reports.

But more than ever, it is now their duty to publish these documents and make them available to us.

And before President Digong asks for these documents, they’d better start creating and beefing up their research and public information departments.

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