The day after President Aquino’s announcement, the Social Security System (SSS) expressed support for his decision to veto House Bill 5842, which proposed a P2,000 across-the-board pension increase. The SSS believes the President’s decision will help to preserve the pension fund’s long-term sustainability.
At first glance, the proposed pension hike seemed to be a blessing to all SSS pensioners. At a closer look, however, the proposed increase would inflict consequences not only on the 31 million members, but also on the 2.15 million current pensioners.
SSS would need at least P56 billion per year to fund the additional pension, and its implementation would lead to a projected deficit of P26 billion from 2016, instead of earning an estimated income of P41 billion. With the increasing annual deficit and net loss, SSS fund life is projected to last till 2027 at the earliest, or 2029 at the latest. The SSS’s current fund life is good till 2024 or 26 years from now. Had the proposed pension been approved, and taking into account the low market sentiment, the pension fund’s life could dwindle down to 2027 or 11 years from today, affecting prospective and current pensioners.
President Aquino’s decision might not be popular, but it was the right thing to do.
We fully understand the disappointment of our pensioners and where they were coming from as their expectations had been raised with the promised monies. But it is gratifying to hear from some pensioners themselves who understand the problems that the would-be increase would have created. As one pensioner said, “Gusto ko din abutan ng anak ko ang kanyang retirement benefit pagdating ng araw [I also want my child to enjoy his retirement benefit when the time comes.]”
How did the proposed bill get through Congress and reach the President in the first place? Despite the fact that SSS presented the financial impact of such a move, the proposed bill went through both Houses of Congress with unusual speed. As a well-known columnist told me in reaction to the proposed pension increase, “the problem with some people, it’s easy for them to give away money that is not theirs. I want to receive my pension a few years from now, so please keep away from my pension fund!” Plus the fact, of course, that it was the popular thing to do.
It is not surprising that there is so much noise about the matter. It is election season, after all, and as politicians are wont to do, every bit of publicity is a golden opportunity.
Our members can be assured that for as long as it is feasible and actuarial studies show that the pension fund can afford it, SSS will not hesitate to initiate benefit enhancements. In June 2014 SSS implemented a 5-percent across-the-board pension increase for about 2 million SSS pensioners.
In June last year it successfully pursued the increase in SSS funeral benefits from P20,000 to a variable amount of up to P40,000. Effective September 2013, SSS pensioners under the Employees’ Compensation (EC) Program received an across-the-board pension increase of 10 percent, and EC funeral grants were doubled from P10,000 to P20,000.
It is our responsibility to provide meaningful benefits to the current and future members and beneficiaries without compromising the fund’s long-term sustainability. At stake is our members’ trust and assurance to reaping the fruits of their labor throughout their decades of employment and retirement.
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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
Right Decision for the WRONG REASON.