Budget chief: Pension hike means higher contributions

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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.

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“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.

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9 Comments

  1. Panindigan mo Mr President ang pangako mo sa mga nagtiwala sa iyo noong May 2016 at pirmahan ASAP ang well deliberated resolution ng Kongreso and then afterwards do what you can to help increase the fund life of SSS even not using taxpayers money with the bright boys in your cabinet and new executives of SSS there are many ways in your power to do it hwag lang mga lazy solutions. Mr President do what is right for the poor pensioners and then use your vast powers to remedy the negative effects even kick the asses of those economic advisers who are anti poor. Understand Mr President? If not resign now you are like Mr Aquino.

  2. Those who will receive the SSS pension benefits have contributed to the system while they were working and in turn invested for many long years such as for 10 yrs and 20 yrs. which shld have earned dividends and interest based on the kind of investment made by those officers appointed to manage the money. Mr. Diokno,, it is unfair for the workers who had for many years sacrificed to save and put aside some amount of money, , and if they are given the increase as proposed amount in increments of 1000 and 2000 ,in their senior years, it is miniscule compared to the millions of money as bonuses given to the executive SSS board members yearly and no one among elected politicians would question it.. This is another example of corruption against the SSS contributors who is the owner of the funds, and who paid salaries to the SSS employees and its board executive members. This has to stop. And for Diokno to say its unfair for the President tot be concern, he must do something to investigate why those executives were given sizable amount of bonuses yearly aside from their high salary.

    • The concept is very simple: if one is employed in the private (that is not with the government), they contribute to SSS and when they retire, they get their pension from SSS. Whether the SSS managed the funds of SSS responsibly or irresponsibly, it is the problem ONLY of members of SSS. That said, SSS members DO NOT have any right to ask other tax-paying pinoys to subsidize their pensions JUST because SSS is short on funds. Have you heard of GSIS members demanding financial help from SSS to fund GSIS programs? NO!

    • if you have a problem with administrators of SSS, then you should recruit your fellow SSS members to do something about them if you think the government is not helping you … otherwise if you are not willing to do any concrete actions to protect your interests, then why should you expect others to do something for you?

  3. Let us not make the President lose face on this campaign promise of his. Based on the statements so far made, the P1,000-peso increase could already be given. Even the SSS concedes this when it announced late last year that it is prepared to give the increase in January 2017. As a matter of fact, everyone thought it was merely a formality for the SSS to have brought the proposed increase to the President. As for the second P1,000-increase, that can be studied and re-studied until kingdom come, for all we care.

  4. There were 2,000,000 senior citizens plus another 4 millIon senoir citizen dependents that did not vote for the Liberal Party president nominee mainly because of Pinoy veto of the SSS increase. That is the main reason why Duterte won period.

  5. Ano be yan? 2015 pinagdebate pa yan sa kongreso hanggang ngayon hindi pa alam kung ibibigay o hindi. Bakit Hindi pinatawag ng kongreso ang mga economic managers ng Presidente during the final deliberation para wala na sana sagabal before Congress approves the resolution? Or else if Congress can prove that they are right then they must assert their independence and do what it takes to do even if the President do not sign it. The problem in the SSS even before was their mismanagement of the funds and now the pensioners are in the receiving of all the these shenanigans! Mr. President give what is due to these pensioners and take corrective actions on the part of the SSS managers who are having grand time with their mega bonuses and and other pays.