LAST week members of the news media asked for the Social Security System’s (SSS) reaction to the possible P2,000 across-the-board increase in pensions being proposed in Congress. SSS President Emilio S. de Quiros Jr. said that, while the SSS wants its members and pensioners to have better benefits, it, too, has the responsibility to ensure the long-term viability of the pension fund.
The SSS chief said managing the SSS is a balancing act. “We always balance things. If you were to look at the operations of the SSS, there are only four moving parts. You have two inflows, which are your contribution and investment income, and the outflow side, which are the benefits disbursed and our operating expenses. So, if you increase your benefits, something has to give way somewhere or else you have to dip into your reserve funds. And, so far, we are able to increase the reserve fund significantly. If you will recall, when we came in [in 2010], the total assets of the SSS was about P290 billion. But now our assets are at P444 billion already. So we have added roughly P150 billion into the reserve funds,” he told reporters.
However, with the proposed P2,000 across-the-board increase, the SSS management said that based on a study of its actuary, the life of the pension fund will be shortened by 13 years, from 2042 to 2029, and its reserve funds wiped out unless something is done to prevent this. One effective way is to raise the rate of contribution. If this cannot be done, the SSS, as a last resort, could call on the RP guarantee for the government to subsidize the benefits of its members and pensioners. These were the options mentioned during the news briefing.
Unfortunately, some of the headlines after the briefing gave the wrong impression that the SSS is planning to increase the rate of contributions soon, which had some sectors in a huff. This prompted the SSS to issue a statement that it has no plan to increase contribution rates in the immediate future. De Quiros said that, although a contribution hike is much needed to improve the actuarial soundness of the SSS funds, the agency is not seeking for another rate increase at this time.
Some might say that the SSS is being a wet blanket for going public with the result of its study on the impact of the proposed pension increase on the fund’s long-term viability. It has no choice. It is duty- bound to inform all its stakeholders of the possible risks and threats on the sustainability of their pension fund. It is duty-bound to ensure that today’s members, their children and their children’s children can look forward to receiving social-security benefits in the future.
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For more information about the SSS and its programs, call our 24-hour call center at (632) 920-6446 to 55, Monday to Friday, or send an e-mail to member_relations@sss.gov.ph.
Susie G. Bugante is the vice president for public affairs and special events of the Social Security System. Send comments about this column to susiebugante.bmirror@gmail.com.