Companiess back SSS pension hike bill


THE Philippine export community welcomed the approval at the House committee level of the bill seeking to raise the Social Security System (SSS) monthly pension, but said the additional benefits should not come from increased contributions of both employers and employees, as both are already burdened by too many deductions.

Sergio Ortiz-Luis Jr., president of the Philippine Exporters Confederation Inc. (PhilExport), a nationwide exporters’ association of 4,000 small and medium-sized enterprises (SMEs), said raising the pension benefits of private employees is commendable, as current levels fall way below those provided public employees by the Government Service Insurance System.

“However, while this is a welcome move, it is unclear where the pension increase will come from,” Ortiz-Luis Jr. added.

On September 7, the House committee on government enterprises and privatization approved 16 bills, all seeking a P2,000 across-the-board increase in the SSS monthly pension with a corresponding adjustment of the minimum monthly pension.

The committee chaired by Rep. Jesus Sacdalan approved the bills which aim to amend Section 12 of Republic Act (RA) 1161, as amended, otherwise known as the “Social Security Act of 1997.”

About two million current and future SSS pensioners and their families stand to benefit from the proposal.

The proposed amendment to Section 12 of RA 1161 provides that the minimum monthly pension shall be P3,200 for members with at least 10 credited years of service and P4,400 for those with 20 credited years of service.

At present, the law provides for a minimum monthly pension of P1,200 for members with at least 10 credited years of service and P2,400 for those with 20 credited years of service.

The committee members agreed to adopt the committee report of the 16th Congress, which consolidated the various proposals, to help fast-track enactment of the pension proposal this 17th Congress.

The House and the Senate approved the proposal during the 16th Congress but former President Benigno Aquino 3rd vetoed the bill.

Ortiz-Luis in a PhilExport position paper recommends that the additional benefits “be obtained from the SSS fund build-up through the years, which we understand earns at least P30 billion annually.”

“Another possible source is efficient collection from delinquent members, for which penalties may be waived under a condonation program which supports the proposal of Congresswoman Vilma Santos-Recto in her bill HB 1947,” Ortiz-Luis added.

He also pointed out the SSS fund continues to grow as new employees enter the labor market and “should provide a sustainable pool from which to draw current and future benefits.”

Ortiz-Luis further referred to Section 4 of the Social Security Act of 1997, declaring that the SSS is directed “to provide for feasible increases in benefits . . . Provided, further, That such increases in benefits shall not require any increase in the rate of contribution.”

In saying that SSS contributions should not be increased, the export industry leader explained that employers already face many challenges in keeping their companies afloat and employees are also saddled with various deductions.

“While these contributions are indeed savings and may be considered small by SSS, their already declining take-home pay cannot absorb any further deductions,” said Ortiz-Luis.

The issue of where the additional money will be sourced from if the bill passes into law was left hanging at the open hearing, however.

George Onkeko Jr., SSS Senior Vice President and chief actuary, told the legislators the agency’s funds were running low because the number of pensioners is growing as more and more people are living longer.

Rep. Rozzano Rufino Biazon, meanwhile, proposed filing another measure that includes a mechanism that provides for the funding requirement.


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