The profit of state-run pension fund Social Security System (SSS) plunged 57 percent to P11.91 billion at the end of the first nine months due to a jump in disbursements mainly from the pension hike implemented this 2017.
SSS data showed that its end-September net revenue dropped from P27.43 billion in the same nine-month period in 2016.
Total expenditures from January to September 2017, which included benefit payments and operating expenses, jumped 28.43 percent to P134.26 billion from P104.54 billion a year ago, the SSS said in a statement issued on Monday.
End-September benefit payments climbed 30.3 percent to P127.78 billion from P98.06 billion a year ago.
“The increase in benefit payouts was higher due to the release of the P1,000 additional benefit amounting to P24.03 billion from January to October and the third tranche of pension adjustments arising from the unlumping of 1985 to 1989 contributions amounting to P72.43 million,” SSS president and chief executive Emmanuel F. Dooc said.
According to Dooc: “The third tranche of pension adjustments for retirees, death and disability pensioners prior to May 24, 1997 or the implementation of the Republic Act No. 8282 or the Social Security Law of 1997 was credited to accounts of qualified pensioners on June 29. The first and second tranche of pension adjustments for retirees, death and disability pensioners, after the implementation of RA 8282, were already released last year.”
In January, President Duterte approved a two-stage monthly pension hike of P2,000, of which P1,000 per month were being disbursed to pensioners since March.
As of September, retirement benefit payments rose 26.75 percent year-on-year to P73.65 billion; death benefits, up 43.51 percent to P40.17 billion; maternity benefits, up 9.24 percent to P4.52 billion; disability benefits up 42.8 percent to P4.64 billion; funeral benefits, up 6.09 percent to P2.85 billion; and sickness benefits, up 8.47 percent to P1.95 billion.
Meanwhile, medical and rehabilitation services benefits declined 13.47 percent and 20.36 percent year-on-year to P9.7 million and P1.1 million, respectively.
Operating expenses decreased 0.05 percent year-on-year to P6.48 billion.
As for revenues, these increased 10.72 percent as of end-September to P146.17 billion from last year’s P131.97 billion.
Members’ contribution, which accounted for four-fifths of total nine-month revenues, grew 11.31 percent to P119.5 billion from 2016’s P107.36 billion.
“The increase in our contribution was due to the aggressive contribution collection drive of the SSS, like our recently launched Run After Contribution Evaders and linkages with various professional sectors,” Dooc noted.
“Component-wise, collections from the employed sector registered the biggest amount at P103.1 billion, followed by voluntary paying members at P10.98 billion, and self-employed at P5.42 billion,” Dooc added.
Investment and other income from January to September increased 8.16 percent to P26.62 billion from P24.61 billion in the first nine months of 2016.
“The pension fund’s financial position remained stable with total assets of P511.72 billion, up by 7.4 percent from P476.4 billion due to the increase in investments and cash equivalents. The SSS’s investment reserve fund as of end-September stood at P490.32 billion or 5.6-percent higher than the P464.42 billion recorded at the end-2016,” according to Dooc.
In September, Dooc said the Social Security Commission would approve the increase in the contribution rate to over 12.5 percent to coincide with the implementation in January 2018 of the first tax reform package that would slash personal income tax rates.
Mr. Duterte had ordered that the SSS members’ contribution rate be raised in increments of 1.5 percentage points per year until 2020 to reach 17 percent from the current 11 percent.
The SSS was unable to implement the contribution rate increase as initially scheduled in May, as it had to wait for the passage of the first tax package, which would increase employees’ take-home.
The contribution rate hike is needed because the state pension fund’s actuarial life will be reduced by 14 years to 17 years to 2025-2028, from 2042 based on 2016 estimates, if members’ contributions would not be increased. /kga