A P2,000 pension increase for Social Security System (SSS) members will not be viable unless there is a corresponding hike in contributions, a member of President Rodrigo Duterte’s economic team said on Tuesday.
“If there’s any solution, I think they should find it within the system and what we are proposing is a salary, a contribution adjustment, a higher pay,” Diokno told reporters in a news conference in Malacañang.
The Palace on Monday said Duterte, who promised during the election campaign to grant the pension hike, had deferred the move until he and his economic managers come up with a compromise or a “win-win” solution.
“What we’re recommending is maybe do it after the tax reform…because in the tax reform, you get more money in your pockets and therefore you are now in a position to contribute a small amount for the pension…so that’s our solution,” Diokno said.
“It is to me unfair for us to call on everybody to give, to increase the pension of a few. You know, our tax system is such that even the jobless…they pay taxes, value-added tax, right? So why should you burden them to give benefits to a private pension system,” he added.
‘Unfair to taxpayers’
Diokno pointed out that the SSS is a pension fund for the private sector and not a government pension fund.
“Even during the time of [former]president [Ferdinand] Marcos, he did not touch SSS, because it is a private pension fund. You contribute to that fund, and when you retire, you get benefits from that fund. So given that perspective, I don’t think it is fair to, say, use the taxpayers’ money to subsidize the benefits of the pension members, the SSS members, right?” he said.
In a recent interview with state-run People’s Television, the President warned of risks facing the SSS under the plan by lawmakers to hike pensions by P2,000.
“With the impasse at the SSS, we had a long debate but the economic managers are having their doubts and they want to talk about it again…I am very sorry but that is how it is. I do not own the money,” Duterte said.
The proposed increase in the monthly pension of SSS retirees was vetoed by Duterte’s predecessor, President Benigno Aquino 3rd, in January 2016.
Aquino had noted that the stability of the entire benefit system would be “seriously compromised” if the pension hike bill was passed into law.
The vetoed bill sought to increase the minimum pension to P3,200 from P1,200 for retirees with at least 10 years of credited service, and to P4,400 from P2,400 for those with over 20 years of credited service.
‘Unfair to the President’
The budget chief said that if he were the President, he would ask the SSS officials to come up with a solution.
“To me, it’s unfair to give the problem to him. In fact, it’s unfair for Congress to have passed that law, which, as you know, President Aquino vetoed. It should not have reached the President’s desk. The [SSS] board of trustees should have exercised leadership and say, ‘No, we cannot do it unless we do the following things,’” Diokno said.
“There are many things like they can increase the collection efficiency. I understand some corporations have been indebted to SSS, maybe they could call on them. But you know, when you pass the buck and give it to the President, that to me is unfair for the President,” he added.
For neophyte senator Sherwin Gatchalian, it should be the SSS executives and not the pensioners who should adjust to allow at least the initial P1,000 pension increase this year.
Members of the board and top management of the SSS have been receiving hefty pay and bonuses at the expense of the members, and without clear performance targets, he claimed.
Gatchalian said that based on the financial report of the SSS, overhead expenses of the government-run fund accounted for 10 percent of revenue, bigger than the industry standard of three percent.
Senate Majority Leader Vicente Sotto 3rd expressed suspicion that the SSS management was working to delay the implementation of the pension increase by passing it to President Duterte.
Sotto said the SSS could afford to give its pensioners the additional P1,000 per month, which is the first half of the P2,000 proposed increase. The second half is expected to be given to pensioners by 2019 or 2020.