The Social Security System (SSS) on Friday said it will implement the P2,000 increase in the monthly pension of its members once the proposed law is approved by President Rodrigo Duterte.
Social Security Commission (SSC) chairman Amado Valdez, however, said SSS wants to make it sure that there will be “no legal impediments” in its implementation.
Valdez, who was the former dean of the College of Law of the University of the East, said Congress should instead pass a resolution for the P2,000 pension hike for retired workers who are members of the SSS from 10 years to 20.
He added that a resolution is better than a law so as to avoid the “legal challenge based on the principles of non-impairment of contracts.”
Valdez said the implementation of the P2,000 increase will preserve the sustainability of the fund.
The SSS charter obliges the fund to pay social security benefits of its members and beneficiaries in times of covered financial contingencies such as sickness, maternity, disability, retirement and death.
Voltaire Agas, SSS chief legal counsel and senior vice president for legal affairs and enforcement, agreed with Valdez’s concerns for their connection with the “constitutionality” of a bill that would appropriate SSS funds, which are private in nature and already obligated to finance the benefits of currently contributing members.
“We need to consider its [pension increase]impact from an actuarial and financial perspective as well as from a legal standpoint,” Agas said.
The SSS will implement the increase in two stages: the initial P1,000 across-the-board pension increase to be given in 2017, and the remaining P1,000 increase taking effect in 2022 or earlier.
“Implementing the pension increase on a staggered basis will help cushion its financial impact on the SSS fund. It will also provide SSS some leeway to shore up its funds by enhancing its generation of revenues through improved collections and innovative investment activities as allowed by law,” Valdez said.