Following the approval of P1,000 increase for pensioners of the Social Security System (SSS), lawmakers on Thursday backed the plan of the pension agency to increase members’ monthly contributions.
Party-list Rep. Rodel M. Batocabe of Ako Bicol and Nationalist People’s Coalition Rep. Rodolfo T. Albano III of Isabela said increasing the members’ contributions will save the SSS from potential bankruptcy.
“It’s a circle of life. You cannot reap what you have not sown. So we have to increase contributions to keep the SSS afloat. Otherwise, we might just as well close the SSS,” Batocabe said in a text message to the BusinessMirror.
Illegal
Warning against what he termed as blatant law violation, Senate President Pro Tempore Franklin M. Drilon said the Duterte administration could not increase monthly contributions of SSS members to bankroll a plan to raise benefits of 2 million SSS pensioners.
Such action, Drilon said, is contrary to the law.
In a news statement issued on Wednesday, the senator asserted the SSS is “not allowed to raise the premium rates so it can increase benefits.”
He invoked Section 4 of Republic Act 8282, which, Drilon noted, clearly prohibits the SSS to recommend increase in benefits that would require an increase in contribution.
“While the executive’s decision to finally grant the long-awaited increase in the pension of SSS retirees is commendable,” Sen. Drilon warns, “it should not be used to justify an increase in the premium payment.”
According to Drilon, the increase in benefits of our pensioners must not come from a similar increase in the burden shouldered by current SSS contributors. “The law is crystal clear in that regard,” he added.
The senator quoted Section 4 of RA 8282, which states that the SSS shall have the powers and duties “to provide for feasible increases in benefits every four years, including the addition of new ones, under such rules and regulations as the commission may adopt, subject to the approval of the President of the Philippines: Provided that the actuarial soundness of the reserve fund shall be guaranteed: Provided, further, that such increases in benefits shall not require any increase in the rate of contribution.”
Drilon said this means the SSS can only implement an increase in the benefits of its members, subject to the approval of the President, “if such increase is based on the actuarial soundness of the reserve fund” and as “such shall not require any increase in the rate contribution.”
But Drilon noted that SSS Chairman Amado D. Valdez in an earlier statement was quoted as saying that, “At the same time, his decision to implement the pension increase with a corresponding contribution hike and increasing the MSC [monthly salary credit] limits supports the continuing reforms in the 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.”
The senator pointed out that, while the adjustment in the rate of contribution will take effect by May 2017, it is clear that such action is carried out in order to fund the pension increase.“The President’s move to help our aging SSS pensioners is laudable, but the Executive branch must also ensure that this pension hike will not be used as an excuse to enforce higher contributions from SSS members,” Drilon said.
‘Solomonic’ act
Albano, for his part, said it is high time to increase the pension of SSS members. Deputy Speaker and Liberal Party Rep. Romero S. Quimbo of Marikina City, meanwhile, described the increase as a “Solomonic” act.
“That’s the Solomonic solution,” Quimbo said.
House Committee on Appropriations Chairman and National Unity Party Rep. Karlo Alexei B. Nograles of Davao City said small sacrifces are needed for the benefit of all Filipinos in the future.
“This was a commitment made by the President and it only shows that he keeps his word. This extra pension for our retirees and their beneficiaries will definitely go a long way in making life a little better for our people. I also don’t see any reason to question the increase in contribution because it’s really been a while since we had a contribution increase,” he said.
“We all have to learn how to make small sacrifices for the people around us. It is a small price to pay as it would also benefit all of us in the future,” Nograles added. During the 16th Congress, former President Benigno S. Aquino III vetoed the pension-hike proposal, saying he was worried that the stability of the entire SSS benefit system would be seriously compromised if he would allow the increase.
On Tuesday the SSS has declared its support for President Duterte’s decision to approve an across-the-board pension increase of P2,000 that would benefit the agency’s over 2 million pensioners, with the initial P1,000 increase effective this month and another P1,000 in 2022 or earlier.
However, the President has 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-percent contribution rate and lifting the maximum MSC to P20,000, from the current P16,000 by May 2017.
“[The President’s] decision to implement the pension increase with a corresponding contribution hike and increasing the MSC limits supports the continuing reforms in the 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,” Valdez said in a news statement.
Charter violation
While they welcomed the P1,000 pension increase, members of the Makabayan bloc said the plan of the SSS board to increase the monthly contributions of its members is against its Charter.
Party-list Carlos Isagani T. Zarate of Bayan Muna, citing the SSS Charter, said such increases in the pension of its members should not require any increase in the rate of contributions.
According to Zarate, they are now studying the final copy of the resolution, which the SSS Board submitted to Durtete, saying his group is ready to question the planned increase before the Supreme Court.
Meanwhile, they urged SSS members to oppose the planned increase in contributions from 11 percent to 12.5 percent, or an increase of 1.5 percent on the members’ monthly contributions.
Party-list Rep. Ariel B. Casilao of Anakpawis, instead, demanded reforms in the institution such as improving its collection rate and coverage, getting rid of huge salaries and bonuses of executives and risky investments to the private sector.
In December 2015, Casilao said the delinquency in premium contributions and penalties of employers pegged up to P4.845 billion in the National Capital Region. Also in the same year, the Commission on Audit upheld its decision ordering SSS to return the P71 million worth of illegal bonuses.
With Butch Fernandez
Image credits: Nonoy Lacza
1 comment
Thanks for these caring congressmen. For those who are against the SSS pension hike increase, just think. If the P2000 is approved now, when you retire 20-30 years from now and there is another P2000 increase, you will get P4000. Put in another way, If the P2000 is not given now, 20-30 years in the future when it’s time for you to retire, and you have an increase of P2000 or P1000, then it will only have those incremental amounts. Don’t worry that SSS will go belly up because it won’t. It was, is, and will always be healthy as past performance has shown. Even before IF it goes belly up, the government will step in using our tax money. Better that these taxes are put into SSS IF it will need it, then for the people’s money to go into ghost projects or into the pockets of politician. Pass it on.