President Duterte’s promise to increase the pension of Social Security System (SSS) members will only be feasible if the state-run fund gets additional capital and a hike in members’ contributions, according to its president and CEO Emilio S. de Quiros Jr.
The official, who is in charge until the government appoints a permanent head, told reporters the pension increase could happen “if we have a corresponding increase in contribution payment” on a gradual basis.
He said a “funding mechanism” was also needed to prolong the fund’s life.
According to SSS’ unaudited financial statement for 2015, the fund would last until 2042 for as long as there were no across-the-board pension hikes.
“The SSS, like most defined-benefit social security schemes, is faced with the reality of a less-than-ideal actuarial fund life, and a considerable level of unfunded liabilities. The unfunded liability arises when the liability, or the difference between the present value of future benefits and operating expenses, present value of future contributions, less reserve fund, is positive,” SSS had said. Its updated 2011 valuation pegged unfunded liability at P1.22 trillion.