MANILA, Philippines — Higher expenditures due to the increase in monthly benefits of pensioners brought down the net income of Social Security System (SSS) to about P9 billion in 2017, 72 percent lower than the P32 billion it recorded in 2016.
In an interview, SSS president and chief executive officer Emmanuel Dooc said the state pension fund’s net income declined in 2017 due to the P32 billion additional benefits released to SSS member-pensioners since January last year.
“A major reason (for the decline) was the pension hike where we paid over P32 billion plus,” Dooc told reporters.
President Duterte in January last year approved an increase of P1,000 in the monthly benefits of SSS pensioners. This was retroactively implemented by the SSS in March.
If not for the pension hike, Dooc said the SSS could have posted a positive growth in net income in 2017.
“Our net income is more or less P9 billion last year. So you add that to the P32 billion plus, which we paid for the pension hike increase, we would have posted a very good net income last year, over P40 billion,” the official said.
“We would have exceeded (the 2016 net income) if not for the additional pension hike,” he said.
Amid the declining financial position of the SSS, Dooc earlier said the state fund is pushing for the increase in the contribution of its members.
He said the SSS wants the contribution rate of members to increase this year to 14 percent of the monthly salary credit from the current 11 percent.
This would continue in tranches of 1.5 percent each year until the total rate reaches 17 percent by 2020.
In addition, the pension fund is also eyeing to increase the minimum salary credit of members to P4,000 from P1,000 and the maximum salary credit to P20,000 from P16,000.
Dooc said the increase would protect the viability of the pension fund and enable it to meet its obligations to members.
Based on the SSS’ actuarial studies last year, the pension hike cut the actuarial life of the fund by 10 years to 2032. If the SSS implements the premium increase, Dooc said the fund life would reach 2045, instead.
For the contribution hike to take effect, Dooc said the management is just awaiting the enactment of a bill which would empower the Social Security Commission to adjust rates, or for the President to release an executive order granting the increase, whichever comes first.