IN the wake of the presidential veto of the bill seeking to increase by P2,000 the pensions of Social Security System (SSS) pensioners, one of the often-mentioned solution to shore up SSS funds was to improve its collection efficiency. Proponents of the measure claim that SSS collection efficiency is only 38 percent and, therefore, it should exert more effort to collect more in order to have more funds to finance the proposed pension hike.
A closer look at the data shows that SSS collection efficiency is, in fact, 88 percent and not 38 percent as being bandied about.
Based on the 2013 Commission on Audit (COA) report, SSS employer delinquency stood at P13.5 billion, which represents the amount that the SSS should have collected from employers for their workers’ contributions. For the same year, contribution collections reached P103 billion, which, when added to the P13.5 billion, comprises the total collectible amount for the year. Collection efficiency is then computed by dividing actual contribution collections by the total collectible amount, resulting in 88 percent.
The often-cited collection efficiency of 38 percent is what the SSS considers as the coverage ratio. It is computed as the number of actively paying members at 12 million, over the total covered members at 33 million. The 12 million refers to members who regularly pay their contributions, while the 33 million represents the total SSS membership, which includes workers who paid only once and those who pay contributions intermittently.
These nonregularly paying members tend to be under voluntary SSS coverage, such as overseas Filipino workers (OFWs), self-employed workers, or informal-sector workers. According to the World Bank, about 75 percent of the country’s workers come from the informal sector. These types of workers are much harder to reach, and have less capacity to pay their SSS contributions regularly.
The question is: How should the SSS performance in collection efficiency be measured?
In terms of collection efforts in the formal sector, the SSS has achieved major gains in bringing down employer delinquency from a total of P325 billion, as cited during the deliberations on the Social Security Condonation Act of 2009, to only P13.5 billion based on the 2013 COA report—showing an improvement of over P311 billion.
This data is confirmed by the Department of Labor and Employment’s (DOLE) Labor Laws Compliance System (LLCS). Since the full implementation of the LLCS in 2014, the DOLE has covered a total of 109,826 establishments, of which 98,355 were found compliant with the Social Security law, for an overall compliance rate of 89.6 percent.
In the pursuit of strict labor compliance, the SSS and the DOLE formally signed a memorandum of agreement on information sharing in December 2015. The agreement formalizes the partnership between both agencies in fulfilling their respective mandates, especially in ensuring that all employers
comply with labor policies and the Social Security law.
This interagency collaboration would also help facilitate smoother coordination among SSS and DOLE regional offices in regularly monitoring employer compliance and implementing the appropriate sanctions and penalties for violators, in line with guidelines set by law.
But the greater difficulty lies in collecting from SSS members who lack a regular source of income are employed abroad, or working in the informal sector. The SSS has initiated various measures to address this, including expanding the number of SSS foreign offices catering to OFWs; accreditation of cooperatives and microfinance institutions as SSS collecting agents to reach out to workers in hard-to-reach areas; and subsidy partnerships with various agencies, such as the International Labor Organization, which benefited thousands of emergency workers in typhoon-hit areas.
The SSS also launched the AlkanSSSya Program to make payment of monthly contributions less burdensome for self-employed and informal-sector workers, as they needed to set aside only about P10 per day for their SSS savings. The AlkanSSSya Program covers a diverse range of informal-sector workers, such as farmers and fisherfolk, tricycle drivers, market vendors, garbage recyclers, and even inmates engaged in handicraft-making and other livelihood programs during their imprisonment.
Despite these structural barriers to collection, the SSS work force remains undeterred and fully committed in carrying out its mission to provide social protection to Filipino workers.
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For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS Call Center at 920-6446 to 55 which accepts calls from 7 a.m. on Mondays all the way to 7 a.m. on Saturdays.
Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send comments about this column to susiebugante.bmirror@gmail.com.
1 comment
In the strict accounting sense, the collection rate should be total paying members/total collectibles from ALL registered members. So, the collection rate is reallv very low.
If you want to use the higher figure of 88% collection efficiency, then your data is correct but pls do use the 33 million figure. Consider only those who are active members.
What I means is pls. don’t claim that all 33 M will be affected by the pension increase, when in fact those 21 million members (33 M total members – 12 M paying members) may not even be qualified. Therefore, the SSS has not enough funds as computed because now they are using as base 33 M members (who are not paying nor contributing anything to the growth and future of SSS), instead of actual active membership.