Senators on Wednesday expressed their reservations over a plan of the Social Security System to impose a 1.5 percent increase in the monthly contribution of SSS members as a way to offset expected losses from P1,000 pension hike for retired members that was approved recently by President Rodrigo Duterte.
Minority Senator Francis Escudero insisted that the SSS needs to first justify the plan before imposing the increase.
He said the state-run agency must present actuarial studies that would prove that it can afford to fund the P1,000 hike through investments and improved collection.
“They should explain and justify that to the [SSS] members… They should also prove that their previous investments and collection efficiency have improved and that the latter two are not enough to support the additional benefit,” Escudero added.
President Duterte on Tuesday approved the P1,000 increase in the monthly pension of retired SSS members that will take effect this year.
Another P1,000 pension hike will be implemented by 2022, bringing the total increase to P2,000.
The SSS, however, will also impose a 1.5 percent increase in members’ monthly contribution in order to ensure economic sustainability and protection of the members.
Sen. Paolo Benigno Aquino 4th said he was surprised after learning about the planned hike in the monthly premium of its 34 million members, adding that the SSS did not even conduct prior consultation 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.
Senate President Pro-Tempore Franklin Drilon said the increase in the monthly contribution of SSS members is against the law.
“The SSS is not allowed to raise the premium rate so it can increase benefits,” Drilon added.
The senator cited Section 4 of Republic Act 8282, which states that the SSS has the powers and duties “to provide for feasible increases in benefits every four (4) years, including the addition of new ones, under such rules and regulations as the [security system]may adopt, subject to the approval of the President of the Philippines: Provided, That the actuarial soundness of the reserve fund shall be guaranteed: Provided, further, That such increases in benefits shall not require any increase in the rate of contribution.”
“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 said.
The SSS, according to Drilon, could only implement an increase in the benefits of its members, subject to the approval of the President, “if such increase is based on the actuarial soundness of the reserve fund” and as “such shall not require any increase in the rate contribution.”
Sen. Juan Edgardo Angaram 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, said without additional source of funding, the SSS would not be able to provide pension once young members of the SSS retire.
“The SSS won’t have any reserves to pay its future pensioners if it will not impose an increase in members’ contribution,” he added.
Although the President approved the proposed pension hike, Sen. Richard Gordon said, there was still a need for Congress to pass a law that would help the SSS become an even more outstanding manager of the fund.
He added that the law is needed to expand SSS membership, maximize the use of its assets and invest the funds in projects that would ensure a healthy return on investment.
Gordon, chairman of the Senate Committee on Government Corporations and Public Enterprises, assured the SSS that he would continue to provide necessary support to the agency to ensure the extension of its lifespan.
“The Senate will provide the appropriate legislation necessary to strengthen the SSS and to assist it in preserving the sustainability and life of its funds that is considered ideal among other social security systems around the world,” he said.