THE Social Security System (SSS) is set to release P7 billion worth of pension increases for more than two million retirees next month following President Rodrigo Duterte’s approval of the hike, which will be retroactive to January 2017.
Executive Secretary Salvador Medialdea issued a memorandum on February 22 containing the approval of the P1,000 hike in monthly pensions, the initial half of the P2,000 increase promised by the President during the 2016 election campaign.
“Upon representations made by SSS, and subject to existing laws, rules, and regulations, please be informed that the P1,000 increase in benefits of qualified SSS retirees, survivors, and permanently disabled pensioners effective January 2017, has been approved,” Medialdea’s memo read.
The additional benefit will cover future SSS pensioners.
In a statement, the SSS said the projected additional benefit expenditures for the first year of implementation of the pension hike would hit P32 billion. The SSS has been releasing P7.4 billion in regular benefits per month since January 2017.
Almost 2.2 million SSS pensioners are expected to benefit from the hike. The number of pensioners is expected to increase by about 150,000 annually.
The pension increase will be accompanied by a hike in the contribution rate of SSS members to 12.5 percent of their salaries from 11 percent starting May 2017. The increase will range from P15 to P740.
The current SSS contribution rate of 11 percent of monthly salary credits is being shared by the employer (7.37 percent) and the employee (3.63 percent).
The pension increase was among Duterte’s promises during the 2016 presidential campaign.
SSS originally proposed a P2,000 pension hike but government economic managers opposed it, saying it would bloat the liabilities of the pension fund and cut its actuarial life by 10 years if not accompanied by higher contributions.
Budget Secretary Benjamin Diokno, Socioeconomic Planning Secretary Ernesto Pernia and Finance Secretary Carlos Dominguez had warned that a P2,000 pension increase would hike SSS liabilities to P5.9 trillion from P3.5 trillion.
The Associated Labor Unions-Trade Union Congress of the Philippines on Wednesday said the President’s move would benefit pensioners and the economy.
“We approximate the increase would also generate jobs, improve government tax coffers and build more businesses because an equivalent of P2.3 billion a month in the pockets of pensioners would help boost the local economy,” the group’s policy advocate Alan Tanjusay said.
“So this is indeed a welcome development for our pensioners and for our country and we thank President Duterte for doing the right thing,” he said.
WILLIAM B. DEPASUPIL