No pension hike without higher member contribution – SSS

MANILA, Philippines – There is no minimum increase in pension that the Social Security System can absorb without a corresponding member contribution hike, SSS president and chief executive officer Emmanuel Dooc said.

“I don’t think we have that option,” Dooc told reporters yesterday.

“We have to compare the benefits paid versus the contributions received. Even on account of just giving P1,000 or P500, we stand to lose money,” he said in a briefing.

Last October, SSS chair Amado Valdez proposed a staggered increase of P500 over four years as the best option to push through with the pension hike, without an increase in contribution.

However, that was before government economic managers opposed the measure without an offsetting measure, contained in two joint congressional resolutions now sitting on President Duterte’s desk.

Duterte himself admitted last week he could not fulfill his campaign promise without burdening taxpayers, who are bound to shoulder an additional P32 billion in the first year of the increase alone.

Dooc said an increase to 17 from 11 percent on monthly contributions is needed so that the fund would not be depleted 10 years earlier as a result of the pension hike.

“I think there is no question that we are all in favor of giving the increase, but of course, as a responsible body, the commission and also the SSS, we

would only give the additional benefit, provided we can source the fund,” Dooc said.

In 2015, SSS net revenues went down 8.5 percent year-on-year, data showed. As of October last year, it stood at P30.51 billion.

Investments reached P470.19 billion, with average return of investment slightly down to seven percent from 7.04 percent same period in 2015.

Dooc said without the member contribution increase, the fund would be forced to dip into its investment funds, meant to support the long-term needs of SSS.

For her part, Marissa Bugante, vice-president for public affairs and special events said the contribution increase has been on the table for a long time already.

“Even without the increase of pension, part of the SSS reform agenda is to gradually increase the contribution...There are structural defects that we need to fix,” Bugante said in the same briefing.

In fact, Dooc said the SSS even plans to index both the contribution rate and the pension to inflation so that they both increase together with the rise in consumer prices.

“Hopefully, we can go that direction, but we have to work on the formula on how to arrive to that. That will be on the pipeline on proposed amendments (to our Charter),” he said.

This will come on top of a proposed lifting of maximum salary credit to P20,000 from P16,000 so that those with higher incomes will pay higher contributions.

In a bid to raise more funding, Valdez earlier laid out plans for SSS to invest into public-private partnership projects, toll roads and even utilities to have a consistent revenue stream.

Dooc said these are “non-conventional investments” being studied.

“We may need some legislative amendments to help strengthen the SSS,” he said.

“We also do not want that every time there is a clamor for a higher pension, our answer will be to add contributions. We have to prove we can also source funds,” he added.