AFTER finally seeing the long-needed P2,000 per month increase in Social Security System (SSS) pensions become a reality, the contributors (and ultimate beneficiaries) of the system now must worry that the government will impose higher premiums to pay for it, taking an even bigger chunk of what for many Filipino workers are already meager paychecks.
SSS chief Emmanuel Dooc explained that because of the increase – which will take place in two steps – the fund next year faces a deficit of about P13 billion, with projected benefits reaching P168 billion but projected contributions amounting to only P155 billion.
Budget Secretary Benjamin Diokno, Socioeconomic Planning Secretary Ernesto Pernia, and Finance Secretary Carlos Dominguez 3rd issued a joint statement over the weekend calling for a hike in SSS members’ contributions from the current 11 percent of gross pay to 17 percent, saying the “SSS would be bankrupt and left with no funds for other members in the future,” if contributions were not increased to cover the increased benefit payouts.
Specifically, the increased benefits would raise the unfunded liabilities of the SSS from P3.5 trillion to P5.9 trillion, the three secretaries said. Without an increase in contributions, the life of the fund would be reduced by 14 to 17 years, and would effectively be exhausted sometime between 2025 and 2028.
And finally, the joint statement pointed out that an increase in contributions was fair, because pensions have been increased 22 times since 1980, while contributions have only been increased three times in the same period.
About the only point made in the statement from the three secretaries that we agree with is that the SSS should not become a public burden; that is, the public coffers containing the tax contributions of non-members of the fund should not be used to subsidize the benefits for SSS contributors. Beyond that, however, the complaint of poverty reveals a certain laziness on the part of policymakers and the management of the SSS.
The SSS is technically a government-owned and -controlled corporation, and should be self-sustaining, if not actually profitable. The SSS, according to the latest available statistics, has about 33 million contributing members and 2.2 million retirees receiving benefits. The benefits do exceed the direct contributions, but the reason they do is because the funds contributed by a member are ideally supposed to grow over time, through SSS making prudent investments and generating a return.
The projected P13 billion shortfall for next year represents 7.7 percent of the anticipated P168 billion in benefits that will have to be paid to retirees, which is hardly a crisis. With a contribution pool of P155 billion to work with, the resources SSS can creatively apply to smart and profitable investments are formidable. There is no lack of investment talent available either inside the SSS or from the private sector to provide proper guidance as well. With these attributes in hand, the SSS should certainly be able to make the effort to fund its own needs; at worst, it should be able to at least reduce the needed increase in contributions.
Resorting to the unimaginative and oppressive demand to raise members’ contributions is unbecoming of the nation’s economic managers, and pointing out the difference in the number of times benefits have been increased versus the number of contribution increases, given the historically and laughably low amount of retirees’ monthly benefits prior to the most recent increase is frankly an insult to the public.
Filipinos work hard to be able to contribute to the SSS fund for their retirement years. The SSS should do its own job to make sure their money is available when the time comes, rather than asking them for more.