The high profitability of the Social Security System (SSS) is not tantamount to its efficiency, a lawmaker said on Wednesday.
Rep. Sherwin Gatchalian of Valenzuela City, a member of the Nationalist People’s Coalition, made the statement amid the move of the SSS Board to grant a P1 million bonus for each member of the Board which coincides with the increased premium fees for SSS members.
Gatchalian cited that it is unfathomable to resort to such bonus bonanza, considering that the SSS has an unfunded liability of P1.1 trillion as of December 2012. Further, the SSS fund is expected to dry up by 2018 unless it increases the monthly premium contributions of its members by 0.6 percent.
“Profitability cannot be the only matrix of SSS’ performance while clearly neglecting the best interest of its members. Performance should be measured in terms of member-satisfaction and high level of customer service,” Gatchalian pointed out.
The unfunded liability is the amount promised in benefits based on a given period into the future, less the revenues and premiums it is expected to collect.
“The SSS is guaranteed to make money without the threat of competition because it is primarily funded through a mandatory, automatic payroll deduction or voluntary contributions from 27 million active members. It will always be profitable, no matter what,” Gatchalian added.
The mandatory contribution of SSS members, Gatchalian argued, does not push the SSS employees to improve their services because it will profit anyway regardless if the services they render are subpar.
“The SSS management should put the members’ welfare and convenience as a priority before they reward themselves with fat bonuses. Why put another burden on the members when in fact it is the SSS’ fault that it has failed to collect billions in unremitted premiums from delinquent employers? The SSS should first show its sincerity of helping its members by stepping up the level of customer service and address the countless nightmares hounding pensioners and members,” Gatchalian stressed.
“If SSS is after profit, we might as well privatize social security and let market forces and profit motive dictate the contributions and premiums. The members have had enough nightmares in availing loans or receiving their pensions on time and yet the SSS wanted to increase individual contributions to cover the shortfall in the unfunded obligation. Is that fait for the SSS members?,” Gatchalian added.
Gatchalian then pitched that the SSS should take cur from Australia’s two-decade old Superannuation Guarantee Program which is composed of: a means-tested benefit system that is readily available to low-income individual members and a mandatory retirement savings account supported by employers and matched by the government.
The law that covers the Superannuation program requires employers to divert 3 percent of most workers’ salaries into regulated retirement accounts. Employers, in return, get tax incentives. LLANESCA T. PANTI