New SSS charter to yield ₱16-B

The proposed Social Security Act of 2018, which seeks to amend the 21year-old charter of the Social Security System (SSS) would yield ₱16 billion during its first-year of implementation and will somehow

offset the financial impact of the second increase in pension benefits.

Emmanuel F. Dooc, SSS president and chief executive, said this after learning that House of Representatives bicameral conference panel, headed by Rep. Prospero Pichay, adopted Tuesday the Senate version of the bill, thus avoiding any protracted debate on the differing provisions of the measure.

The Senate version was authored by Senator Richard J. Gordon, chairman of the Senate Blue Ribbon Committee, and the Senate Government Corporations and Enterprises Committee.

Both the Senate and the Lower House are expected to ratify the bicameral conference committee report on the measure.

The proposed Social Security Act of 2018 seeks to rationalize and expand the powers and duties of the Social Security Commission (SSC) to ensure the long-term viability of the SSS and thereby guarantee better benefits for members of the state-run pension fund.

The estimated revenues from the new SSS charter, or Senate Bill 1753, is lower than the 136 billion requirement to fund the second 11,000 additional benefit that President Duterte has approved.

President Duterte approved in January, 2017, a 12,000 additional pension for SSS retirees. The first 11,000 was given last year, while the remaining balance will be released by 2022, coupled with a financial mechanism that will sustain the viability of the pension fund.

“If we are able to adopt and implement the scheduled additional contributions that are incorporated in the law, we will be collecting initially maybe about 116 billion a year from the onepercent additional during a 12-month period,” Dooc told reporters.

“It’s not huge because before we envisioned collecting three percent additional contribution in one lump sum that would have given us over 150 billion month. But I’m happy that we have this law and long term there are provisions to collect more,” he added.

Under the measure, there will be one-percentage point increase in the premium contribution of SSS members every other year until the rate reaches 15 percent in 2025.

“We will still tap the investment income if we will be forced to pay out the additional 11,000 but right now we are looking at the expanded maternity benefit, which will cost us additional 14 billion to 15 billion over a year,” Dooc said.

Aside from the higher contribution rate, the law also introduced unemployment insurance or involuntary separation benefits, which will be available to SSS members not over 60 years old who are involuntarily separated from employment.

The benefit shall be paid in monthly cash payments equivalent to 50 percent of the monthly salary credit for two months at most.

Gordon said the bill is an enhancement of the previous laws; it ensures hope that the people would not be a burden to the country; that they are partners of the government not by way of exaction of taxes but by their contribution so that their welfare is assured.

‘’The passage of the bill would expand, protect and increase the SSS fund so that when the time comes, there would be available pension for the people. It will ensure a more meaningful social security protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden,” he explained.

The bill would give the SSS the power to determine the salary credit and monthly contributions of members, which would now allow the commission to increase contributions “depending on the actuarial survey.”

‘’It would also empower the SSS to invest its Reserve Funds to ‘grow the wealth of SSS and ultimately yield higher income.’ However, the investments must satisfy requirements of liquidity, safety/security and yield “to ensure the actuarial solvency of the funds of the SSS,’’ Gordon said.

The bill also calls for the compulsory SSS coverage of both land-based and sea-based overseas Filipino workers (OFWs), provided they are not over 60 years of age. Sea-based OFWs would enroll through their manning agencies.

For land-based OFWs, meanwhile, the Department of Foreign Affairs (DFA) and the Department of Labor and Employment (DOLE) and all their agencies involved in deploying OFWs for employment abroad are mandated to negotiate bilateral social security and labor agreements with the OFWs’ host countries to ensure that the employers of land-based OFWs pay the required SSS contributions.

Otherwise, land-based OFWs will be compulsory members of the SSS and considered in the same manner as self-employed persons.