Pension hike cuts SSS profit by 67% in Q1

The grant of the additional P1,000 monthly cash benefit to pensioners slashed by two-thirds the first-quarter net profit of the Social Security System to P4.01 billion.

The latest SSS data showed that the state-run pension fund’s net revenue during the January-to-March period dropped by 67 percent from P12.2 billion a year ago.

SSS started to release the additional benefit to pensioners in March after President Duterte approved the pension increase last January.

End-March revenues rose to P48.8 billion from P43.5 billion last year as members’ contributions as well as investment and other income increased to P9.5 billion and P9.2 billion, respectively. Total expenditures jumped to P44.8 billion from P31.3 billion a year ago mainly as the higher amount of benefit payments during the first three months offset the decline in operating expenses.

First-quarter benefit disbursements climbed to P42.6 billion from P29.1 billion last year as retirement, death, maternity, disability, funeral grant, sickness and medical services benefits grew year-on-year despite a drop in payments for members’ rehabilitation services.

In particular, retirement benefit payments increased to P24.2 billion from only P16.1 billion a year ago.

During the first three months, death benefits went up to P13.6 billion; maternity, P1.6 billion; disability, P1.5 billion; funeral grant, P967.4 million; sickness, P614.2 million; and medical services, P3.9 million.

Another tranche of P1,000 monthly benefit to pensioners is expected before 2022 or the end of the term of President Duterte, who had also ordered an increase in members’ contribution to compensate for the pension increase.

Based on earlier estimates, the SSS’s actuarial life will be cut by 14-17 years to 2025-2028 from 2042 as of last year if members’ contributions were not increased. —BEN O. DE VERA