• SSS should do its job, rather than ask more from members

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    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.

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    6 Comments

    1. 17% contribution para lumobo din mga bonus nila? eh bakit di sila bumili ng properties para gawing office ng SSS branches kesa palipat lipat sila ng nirerentahang opisina mas malaking tipid pa sana yun.

    2. The SSS Funds should be invested in safe profitable stocks beyond the reach of politicians recklessly spending the funds to get a commission.

      All SSS members must recall that Erap ordered the Government Service Insurance System and the Social Security System during his term to purchase Belle stocks amounting to P1.102 billion in exchange for the commission. This to support his crony Dante Ang. What had happened to the case which Erap must pay in exchange of the pardon granted to him.

    3. Yes! Why are they only talking of the contribution pool? What about the assets that have accumulated all these years? Unless the directors and the government have squeezed it dry for their own pockets. Nobody is saying what total assets are. If the deficit is less than 10% of the total contribution, it should be a lot less of the total assets, which should be earning anywhere between 5% to 10% and even more if, as you rightly pointed out, they are doing their job.

      It is Christmas! I hope the directors are not declaring million peso bonuses for themselves as the previous directors under the daang matuwad administration did.

    4. Driggs Matabaran on

      SSS has been used by previous politician in repaying political favors. Appointments with high salaries and allowances that does not contribute to the overall efficiency of the institution but instead placed a financial burden to it at the expense of the SSS members. It should be managed as a corporate entity with brilliant investment managers worthy of the salary they received…

    5. This editorial is disconcerting. 33 million active contributing members and only 2.2 million retirees to support, and still they are wanting 17% contribution rate. For comparison’s sake let us look at CalPers, which is California’s state retirement system.(not the best example but one with ready published data) It has a little over 1.2 M active contributing members and 611,078 retirees. A few years ago the California legislature passed a reform measure, which raised contribution rates for general members to 8% and for safety (police and fireman) to 11-12% in order to assure it’s viability. Although it continues to be in less than ideal in terms of funding it’s future obligations, It is clear they seem to make do with less.
      I am wondering how can the SSS not make money with so many contributors and a little less than 10% of it retirees. As we can see from the California example, it’s close to 2 to 1 in terms of active members vis a vi retiree and yet they only increased the rate of contributions more modestly than what the SSS is proposing. It may be time to look at the SSS itself, it may have too many employees and executives bloating it’s expenses and possibly how it invest it’s money it gets from members. Hopefully it is not politicized.

    6. At saka ang SSS ang may pinakamanhid, bastos, walang pakialam, at walang modo na mga empleyado. Nag aastang mga hari-harian, o mga nakasulasok na princesa. Dapat lahat sila ay palitan, o pag-aralin ng mabuting asal.