NATION | Senators want deferment of SSS premium hike

Sen. Joel Villanueva, chair of the Senate committee on labor and employment, said the decision of the administration to raise both pension and premium shows how critical it is to ensure the long actuarial life of SSS. File photo | By Paolo Romero and Marvin Sy via Philstar

MANILA, Philippines – While expressing support for a Palace-approved two-step increase in pension for retired members of the Social Security System (SSS), some senators said a corresponding hike in members’ contribution should be deferred.

Sen. Joel Villanueva, chair of the Senate committee on labor and employment, said the decision of the administration to raise both pension and premium shows how critical it is to ensure the long actuarial life of SSS.

“However, I think the SSS board can defer for the meantime increase in premiums because I believe their fund managers can stand much improvement in investing members’ funds and improving and expanding collections,” Villanueva said.

He said during a Senate hearing on the pension increase last year, the SSS’s collection rate was only 38 percent.

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The SSS, he maintained, was apparently content with receiving minimum yields on its investments even if it can work out higher returns considering its huge financial resources.
Sen. Richard Gordon said he intends to craft legislation to strengthen the SSS and improve its financial standing.

“We have to provide appropriate legislation to help the SSS become an even more outstanding manager of the fund so that it could expand its membership, maximize the use of its assets and invest the funds in projects that would ensure a healthy return on investments,” Gordon said.

Sen. Paolo Benigno Aquino IV said while he supports the increase in retirees’ pensions, the decision to hike premiums was made without consultation with employers and workers. “The SSS said it will just start their consultations,” Aquino said in an interview.

Senate President Pro Tempore Franklin Drilon pointed out that Republic Act 8282 or the Social Security Law prohibits the pension fund from offering additional benefits that would require increasing contributions of its members.

“While the executive’s decision to finally grant the long-awaited increase in the pension of SSS retirees is commendable, it should not be used to justify an increase in the premium payment,” Drilon said.

“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,” he added.

Sen. Francis Escudero said the SSS board should justify the need to increase the contributions of its members by presenting proof that it had done all it could to improve its financial status.

Sen. Juan Edgardo Angara, on the other hand, said he is in favor of raising members’ contributions if only to keep the fund alive for future retirees.

But for leftist party-list Bayan Muna, increasing members’ contribution should be out of the question as it is against the law.

“There is no need for such an increase. It is even against the law creating the SSS to use any adjustment in contribution to fund an increase in pension,” Rep. Carlos Zarate said.

It was Bayan Muna that pushed for the P2,000 SSS pension hike. On Tuesday, Duterte approved the increase with the first installment of P1,000 to be given starting this month and the other half to be paid between 2019 and 2022.

Zarate said the SSS could finance the P2,000 pension hike by collecting P325 billion in delinquent contributions from employers and improving its “dismal” 40-percent collection efficiency.

It should also reduce its huge operating cost and the fat salaries, allowances and bonuses received by its officers, he said.

Former Bayan Muna congressman Neri Colmenares said SSS officers received P117 million in salaries, allowances and other incentives in 2014.

Citing a Commission on Audit (COA) report, he said Emilio de Quiros Jr. was paid P4.2 million as president and chief executive officer and an additional P2.7 million as member of the board of trustees, for a total of P6.9 million; while former board chairman Juan Santos took home P4.2 million.

Former insurance commissioner Emmanuel Dooc has replaced De Quiros, while erstwhile law dean Amado Valdez has taken over the post of Santos.

Members of the board of trustees or board of directors of state corporations are not supposed to receive salaries. They get allowances for attendance in board meetings.

Organized labor also expressed strong opposition to the impending increase in monthly SSS premium, while voicing approval for the pension hike.

“There are other ways for the SSS to generate additional income to provide increase in pension. Foremost of which is increasing their collection efficiency, pursuing cases on unscrupulous employers not remitting SSS contributions and scaling down unnecessary operating expenditures,” Partido ng Manggagawa (PM) head Renato Magtubo said.

Kilusang Mayo Uno (KMU) leader Elmer Labog said SSS should not impose financial burden on members just to provide higher pension.

Changing tune

Despite initial misgivings, the business community – including employers group – is now voicing support for the pension hike.

“Originally, the position of PCCI (Philippine Chamber of Commerce and Industry) is that we concur with the position of Finance Secretary Carlos Dominguez that as of now, based on the numbers of SSS funding, it (pension hike) is not possible,” group president George Barcelon said.

“But now that it has been approved by the President, we will support that. At least it’s not a straight P2,000 increase. That is a calibrated move on the President so that the burden is not too big on the business establishment. But nonetheless, our cost will still increase,” Barcelon added.

For employers in the country, they said they simply would have to absorb the cost of higher contribution.

“We were never in favor of the pension increase. We agreed now only because we are in support of the President,” Employers Confederation of the Philippines president Donald Dee said.
“If such involves increasing contributions further, this will surely become an additional burden on both employers and employees. Is business ready for this?” MBC executive director Peter Perfecto said.

Tax program

As debates continue over the wisdom of raising SSS members’ contribution to cover the approved pension hike, the country’s economic managers admitted there is indeed an urgent need to look for sources of additional funds – preferably through a tax reform program.

Speaking on the sidelines of the annual reception for the banking community hosted by the Bangko Sentral ng Pilipinas (BSP) Tuesday evening, Pernia said the government is eyeing the passage or enactment of the first package of the comprehensive tax reform program in May. – With Richmond Mercurio, Lawrence Agcaoili, Mayen Jaymalin, Jess Diaz