SSS revives proposal to hike contributions to ensure benefits in perpetuity

A+
A
A-

SSS president and CEO Emilio de Quiros Jr.: Oppressive and unfair? PHOTO FROM ARCHIVES.PIA.GOV.PH

MANILA, Philippines — The Social Security System (SSS) is reviving its proposal for an increase in contributions from members and their employers, saying it needs to shore up revenue collection so it can sustain the benefits extended to pensioners.

 

An official of the pension fund for workers in the private sector is hoping legislators will prioritize in the 16th Congress a bill seeking to amend the fund’s charter so that an increase in contributions can be imposed.

 

An SSS commissioner, Diana Pardo-Aguilar, said the proposal had the backing of President Aquino.

 

Aguilar said the SSS needed to implement an increase in contributions soon to help it achieve the goal of making the fund perpetual. Achieving perpetuity is an international standard for any pension fund.

 

The current “actuarial life” of the SSS fund is only up to 2039, according to the commissioner. This means that should the existing rates of contributions remain unchanged, the SSS will be able to service pension claims only until 2039.

 

Growth in SSS expenses has been outpacing the increase in revenue collection, Aguilar said.

 

But she said than an actuarial life of until 2039 was not bad and was far from being worrisome.

 

Nonetheless, Aguilar said the pension fund would have to increase its collection to achieve perpetuity and to enable it to continually and efficiently service its members.

 

Currently, the SSS has around 29 million members.

 

Aguilar said the SSS could not yet disclose an official rate of increase in contributions that it would like to impose.

 

But should SSS officials and stakeholders decide that the increase was too big, then the SSS could push for several but smaller amounts of increases to be implemented over several years.

 

“We can make the increase gradual if that would be more feasible. We will consult with stakeholders, including employers,” Aguilar said at a press briefing.

 

Under the current contributions schedule, the minimum monthly contribution is set at around 10.4 percent of an SSS member’s compensation. The member shoulders around 30 percent of the contribution, while his or her employer shoulders 70 percent.

 

As the SSS underscored the need to increase contributions, it reported a surge in net revenue. SSS president Emilio de Quiros Jr. said the pension fund registered net revenue of P36.2 billion in 2012, up by 42 percent from P25.55 billion in 2011.

 

The increase in net revenue was attributed to efforts to streamline operations aimed at improving collection from members.

 

De Quiros also reported that the SSS collected P16.44 billion in net revenue in the first four months of 2013, on track of meeting the goal of collecting P30 billion for the full year.

 

About 70 percent of the revenue came from contributions, and the balance from investment income.

 

De Quiros said that with growing net revenues, the SSS financial standing should not be viewed as something that was in trouble.

 

“The SSS is not losing funds; we are actually registering very strong net revenues,” he said.

 

Nonetheless, he stressed the need for an increase in the rate of contributions so that the acceleration of growth in expenditures expected in the years to come would be sufficiently met by rising revenue.

Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.

  • skyla

    mga hinayupak kayo sa SSS wag nyong sabihin na pagdating nang araw ang pension namin ay d mabigay kasi wala na kayong pera. ang dami kasing emplyado na wala namang ginagawa kundi umupo lang at magpapila sa mga tao. trabaho ba yang mag papila nang tao, kahit na bata alam pumila

  • http://www.braintecs.com wishfull thinking

    Baka may investment sa Aman Futures…kaya nabawasan…ehehe

  • sanjuan683

    Nagamit siguro sa nakaraan election ganyan sa Pinas pagkatapos ng election asahan mo tataas ang bilihin at mga contributions ng SSS. Wala naman kayo kakumpetensia magtataas pa kayo. Ito nga pension ko 7 years wala man lang kayo increase naabutan na ng pagtaas ng bilihin. Ginagamit pa ninyo yan sa pagbili ng stock na kumikita naman ngayon hihingi kayo ng contribution increase.

  • aldren85

    To SSS commissioner Diana Pardo, please show us the computations that you made to determine 2039 as the end of SSS if contributions are not increased. I know these might be “mathematically complex”, but at least we can determine if your actuarial assumptions are realistic. Also please show us how the increase in expenses of SSS has outpaced the increase in revenue collections. The SSS might have a problem in operations (on one hand) and collections (on the other hand) and instead of improving these two, wants the easy way, increase the contributions. It is easy to spend other people’s money and not be held accountable for your inefficiencies.

  • aldren85

    While the seed money to establish SSS came from the government, it is an organization actually owned and funded by the contributions from millions of employees and employers for the more than 50 years. I would like to see the annual audited financial reports of SSS for the last 10 years and also the assumptions made by their actuaries in the last actuarial valuation for the contributions. We would like to be given financial and operating actual figures of total contributions, operating expenses, interest expense and interest income, investment income, benefit and pension payouts, so that we may determine if after total inflows (contributions, investment income, interest income, other income) minus total outflows (expenses (breakdown please), benefits and pension payouts) is still positive or negative. In other words, more transparency in the operations and management of SSS. I once remember an American senator call the social security system ” a great hoax”. I hope he was wrong. I am a retiree and I have a disappointing monthly pension after working for 36 years, losing 10 years of my contributions.

To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.

Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:

c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94