State-run pension fund Social Security System (SSS) is amenable to a proposal to fund through government subsidy the additional money it needs in case the proposed pension hike pushes through.
“We are one with legislators in their desire to provide higher pensions for SSS pensioners. However, we also have to look after the welfare of other SSS members and ensure that the SSS fund life is intact,” senior vice president and chief actuary George S. Ongkeko Jr. said in a recent hearing of the House committee on government enterprises and privatization.
Based on the SSS’s estimates, a P2,000 pension increase would require an additional fund of P56 billion in the first year of implementation to pay about two million pensioners.
“Granting higher pensions without the parallel implementation of provisions on the source of funding can result in billions in annual net losses for the system, especially for proposals such as the P2,000 pension increase,” Ongkeko said.
According to the SSS, its actuarial valuation in 2015 showed that the contribution rate should also be hiked to at least 17 percent if ever the pension would be increased.
“At present, SSS funds are projected to last until 2042 but will be shortened to 2025 if the increase will be effected without the additional source of funds,” it explained in a statement Tuesday.
“We made computations for all the different legislative proposals on the across-the-board pension increase. All of it, including those with proposed gradual or staggered pension increases, should have a corresponding increase in contribution or an additional and sustainable source of funding,” Ongkeko said.
The SSS quoted Surigao del Sur Rep. Prospero Pichay as proposing that the government provide the SSS subsidy that would cover the huge cost to be incurred from a pension hike.
“We are also amenable with the proposal of Representative Pichay for government subsidy. We have always supported any benefit increase provided there is a sustainable source of funding,” Ongkeko said.