THE Social Security System (SSS) will have to implement a number of “remedial measures” to extend its actuarial life if it will increase the pension of its members, the agency’s president and chief executive officer, Emmanuel Dooc, said on Wednesday.
“The [Social Security] Commission and SSS is a responsible body and so we will only give the additional benefit, provided that we can source the fund and not to the detriment of the SSS members. There are conditions that will be required,” Dooc told reporters.
Among the “conditions” needed were the 1.5-percentage-point increase per year in members’ contribution from the current 11 percent, lifting of the P16,000 maximum salary credit to P20,000, increasing the minimum salary credit from P1,000 to P4,000 and indexation of pension and contribution to inflation rate that will require a legislative measure.
“If you combined all of these remedial measures, the end result is we will have a stronger fund, a longer fund life, adequate fund to sustain and support the increase. These are the reforms that we want to introduce together with additional pension increase. We have studied these and we have reviewed our numbers and if we were allowed to introduce these remedial measures, I think we can afford to give the P1,000 additional pension benefit. We will not give it without these conditions,” Dooc said.
With these remedial measures, the life of the pension fund will only decrease by two years, or until 2040.
“The impact is not that significant and as we go along — introduce additional contribution and lift the maximum salary credit on subsequent years — the fund life will even improve further. Then it will slightly go down once we pay additional P1,000 pension benefit come 2022. But it will again go up, and we will have a fund life longer than the current level,” he explained.
Another option, Dooc said, is for the SSS to wait for the passage of the tax reform measures of the government.
“In fact, if we can combine all of them — the remediation efforts together with the impact of the tax reform measures — the increase in the additional pension can be sustained,” he said.
The country’s economic managers have balked at granting a P2,000 pension increase because they believed it will shorten the life of the pension agency.
Granting a pension hike was one of the campaign promises of President Rodrigo Duterte.