The Social Security System (SSS) has declared its support for President Rodrigo Duterte’s decision to approve an across-the-board pension increase of P2,000 that would benefit the agency’s over two million pensioners, with the initial P1,000 increase effective this month and another P1,000 in 2022 or earlier.
However, the Chief Executive instructed the SSS to incorporate the proposal of the economic managers to ensure the sustainability of the pension fund by implementing an additional 1.5% contribution rate and lifting the maximum monthly salary credit (MSC) to P20,000 from the current P16,000 by May 2017.
Duterte said that “SSS should be seen as long-term savings and not an expense,” adding that actively-paying members enjoy six types of benefits and loan privileges.
The President added that legal enforcement of the SS Law will be strengthened through issuance of Executive Orders to ensure social protection of workers.
SS Chair Dean Amado Valdez thanked the President on his decision to grant the pension hike. He also acknowledged the assistance of economic managers and lawmakers who showed concern for SSS pensioners and members.
“This shows that the President truly cares for our elderly who have been waiting for the outcome of the proposed P2,000 increase. At the same time, his decision to implement the pension increase with a corresponding contribution hike and increasing the MSC limits supports the continuing reforms in SSS to consider the welfare of the greater population of over 30 million members, who look forward to their own SSS pensions at the time of their retirement.”
Once implemented, the combination of additional contributions and increasing the MSC ceiling would put the SSS lifespan at 2040 as of 2017.
Dean Valdez concurred with the Chief Executive’s pronouncement that the taxpayer’s money should not be used to fund the SSS pension hike. “He is being responsible when he said the government should not subsidize the pension hike because SSS is a private pension fund by nature and it is unfair for taxpayers to shoulder increases in SSS benefits.”
To help fund the proposed pension hike, Dean Valdez said SSS will also intensify its collection efforts and improve its collection efficiency by going after non-complying employers.
Another strategy to improve revenues is in the area of investments. Dean Valdez reiterated SSS plans to diversify assets by directly investing in up to 25 percent ownership in a wide range of industries, including infrastructure projects like toll roads, real estate and even lotto operations.
On the issue of operating expenses, Dean Valdez said that SSS has cut down its operating expenses in its 2017 budget by P1 billion as it seeks measures to improve its performance and address the existing structural imbalance in funding.
Dean Valdez also responded to issue of salaries and bonuses of SSS officials which have been the subject of criticisms in debates around the pension hike issue. He clarified that the compensation and performance-based bonus of SSS have been capped not only for SSS but across all GOCCs with the enactment of the GOCC Governance Act and Executive Order 24 in 2011.
“We will make sure that compensation is performance-based. If all the targets we have set have been accomplished, then I think it is just fair to give incentives for good performance. This is, after all, is a practice in all government offices and private corporations,” said Dean Valdez.
“There are a lot of interventions that we are already doing to raise more funds for the SSS pension fund,” said Dean Valdez.