SSS eyes options to pursue pension increase

MANILA, Philippines - The Social Security System (SSS) presented yesterday six options on how to pursue the planned pension hike of P2,000, none of which involved increasing contributions, hence risking fund depletion just after a decade.

Of the six, a staggered increase of P500 over four years will result in the depletion of the agency’s fund life by 2027, down from present 2042.

Two which give priority to pensioners aged 80 and above will shorten the agency’s fund life by 2025, just three years after the Duterte administration, while three others – including just a P1,000 hike – are still being studied.

“The contribution increase will be the last option,” said SSS chairman Amado Valdez.

Instead, the increase, which would cost P56 billion in the first year alone, would be financed by dipping into the fund’s P456.91-billion investment fund as of the first semester, the SSS said.

“That is why we want to stagger it so that the effect will not be too high and each year that we hold it, we are able to push further the actuarial life,” Valdez told reporters in a briefing.

Still, without offsetting measures, the pension fund for private workers risks getting depleted even before 32 million of its present 34.25 million contributing members get qualified for their pension.

The figure was based on an estimate about 150,000 additional pensioners per year, according to SSS.

Even before getting elected, President Duterte has promised to grant the P2,000 pension hike to 2.02 million SSS pensioners, which his predecessor, former president Benigno Aquino III, vetoed.

Since then, bills have been re-filed to that effect in Congress and had since been approved at the committee level in both houses.

Pending approval, Valdez earlier reviewed the plan upon taking over two weeks ago. He said further study of the proposals would be conducted on Nov. 8 together with actuarial experts.

But he maintained yesterday the government has enough time to recover from the fund losses as a result of the increase.

While the remaining life of 10 years is “not really a comfortable period,” Valdez said it is still “quite a long period” to discuss revenue-enhancing measures for the fund.

Asked what measures will he push in Congress, Valdez said government subsidy is a “possibility,” although he conceded even this may be a hard sell for legislators.

“It’s going to be a challenge...This is where patriotism comes in. It’s a cooperative effort...,” he said.

In the long run, Valdez said increasing the pension will benefit more the government by providing more opportunities to pensioners.

“The government is conscious that the number of retirees are growing,” he said.

“Think more about investing in our social program. We want to have a self-reliant policy with the government as the last resort,” he said.