President Rodrigo Duterte is not keen on proposals to defer an increase in monthly contribution of Social Security System (SSS) members starting this year to compensate for a pension hike, according to a Palace official.
In a statement, Presidential Communications Secretary Martin Andanar on Thursday said Duterte already made his decision after “carefully” weighing the problem.
The President on Tuesday approved the P1,000-pension increase starting this year but with a corresponding 1.5 percent increase in monthly premium starting May 2017.
“The President has carefully weighed both sides to solve the SSS impasse and he has already made a decision.
The increase in the SSS pension effective this quarter will be financed by current contributions and investment income,” Andanar told reporters.
He said the increase in premium would be used to strengthen the long-term viability of the pension fund.
“The planned 1.5 percent increase in contribution in May 2017 will be used to improve the Investment Reserve Fund in order to generate higher yields for investments, and to further strengthen the overall viability of the pension fund so it can meet future obligations,” Andanar added.
But senators from the Liberal Party have questioned the President’s decision.
While lauding the pension hike, Senate President Pro-Tempore Franklin Drilon on Wednesday called the increase in SSS premium “invalid” and “illegal.”
Drilon pointed out that Republic Act 8282 or the Social Security Law prohibits the pension fund from offering additional benefits that would require increasing contribution 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,” he said in a statement.
“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,” Drilon added.
Sen. Paolo Benigno Aquino 4th said he was surprised after learning about the planned hike in the monthly premium of 34 million SSS members, adding that the fund did not even conduct prior consultations with employers and contributors.
Aquino said the SSS is capable of providing the increased pension without demanding that its members contribute more.
“What the SSS should do is to improve the collection efficiency instead of demanding bigger contributions from its members,” he added.
Sen. Juan Edgardo Angara, however, said the increase in SSS monthly contribution is in order to make sure
funds would still be available for future pensioners.
Angara, who heads the Senate ways and means committee, added that without additional source of funding, the SSS would not be able to provide pension once young members of the pension fund retire.
“The SSS won’t have any reserves to pay its future pensioners if it will not impose an increase in members’ contribution,” he said.
In the past 16th Congress, then-President Benigno Aquino 3rd vetoed the law seeking to grant a P2,000-pension increase, saying it would bankrupt the pension fund for private workers.