Duterte OKs SSS pension hike
11,000 will be implemented this month, another 11,000 in 2022
President Duterte has approved a 11,000 increase in the Social Security System (SSS) pension effective this month, Malacañang announced yesterday.
Along with the pension hike, however, is a 1.5 percent increase in the contribution rate, according to Presidential spokesman Ernesto Abella.
“The President has approved a 11,000 pension hike this month,” Abella announced in a press briefing at the Palace.
SSS Chairman Amado Valdez said another 11,000 pension hike will be implemented in 2022 or even
earlier, possibly 2019.
“We projected the next 11,000 in 2022 but if we are able to implement and get favorable results, maybe it won’t take until 2022, maybe by 2019 we’d be able to comply with the next 11,000,” Valdez said.
Abella told reporters that President Duterte approved the increase to “fulfill a social contract with the Filipino people..., while exercising fiscal responsibility to ensure the economic sustainability.”
The funds covering the increase, Abella said, will be through current contributions and investment reserve fund, pointing out that the President is not amenable to using taxpayers’ money for the pension increase because the SSS is a private pension fund.
SSS total assets are 1487 billion as of October, 2016, and its fund life is until 2042. With the 11,000 increase, the fund life will continue until 2040 when the contribution rate and increase in monthly salary credit from 116,000 to 120,000 is implemented by May, 2017, he added.
Thus, starting May, there will a 1.5 percent contribution rate increase or 12.5 percent, from the current 11percent contribution rate.
“In peso value, the additional total contribution will range from 115 to 1740 equally shared by employer and employee,” Abella explained.
“The proper perspective is to view SSS as a long-term savings and not as an expense as actively paying SSS members after all enjoy benefits, specifically six benefits and loan privileges,” he stated.
Abella further said that to ensure sustainability, SSS is setting in place legal action plans to reduce contribution delinquency, as well as executive interventions needed to improve collection through issuance of an Executive Order (EO).
Slight delay But Valdez said that while the SSS pension increase takes effects this month, there might be a slight delay to around February “due to some systems requirement.”
“Kailangan ng recomputations so there might be a slight delay,” he said during the presscon.
With the approval of the SSS pension hike, Valdez thanked the President “for his sense of caring for our pensioners.”
“As father of people, he is the father of everybody,” he said.
Valdez also thanked the economic managers “for the prudence in reminding us that we have to ensure sustainability of the fund.” In doing so, he said, the life span of the fund will even pass the threshold of 2022 and perhaps beyond.
He likewise thanked Congress for expressing the public sentiment about the need to take care of our elderly.
Meanwhile, Valdez said the agency will now crack the whip against erring employers.
“You will find in the following days cases to be filed against erring employers. There will be some contempt charges against employers who do not respond to the summons of the court. Because the fund is a social protection, so that we are ensured that the future generation of retirees is well protected,” he told reporters.
Agriculture Secretary Emmanuel Piñol, who was present during Monday’s Cabinet meeting wherein the SSS pension hike increase was discussed, earlier said the President has ordered the filing of charges against, and the arrest of employers who do not remit SSS contributions of their employees.
Duterte gave the order after he was informed by Valdez that only per 40 percent of the 33 million SSS members are paying their premiums.
No more excessive perks
As the President wants to reform the SSS, Piñol also said Duterte has ordered that excessive allowances and honorarium given to its top officials be stopped as part the measures to streamline and ensure the viability of the agency. (With reports from Genalyn D. Kabiling)
RAVAGED BY FIRE – Residents salvage whatever they can from what remains of their homes in Barangay North Bay Boulevard, Navotas, which was hit by a fire early Tuesday that left over 1,000 families homeless. (Federico Cruz)