MANILA, Philippines - Malacañang defended Wednesday the much-criticized plan of the Social Security System (SSS) to increase the contribution of its members, saying this would allow the pension fund to continue its operations.
Presidential spokesman Edwin Lacierda said that the contributors themselves would benefit from the increased premiums.
“In the end, the higher premiums will benefit the contributors. If we do not increase the premiums, the unfunded liability of SSS will go up,†Lacierda said in Filipino.
“The reason why we’re increasing the premium is for people to continue to enjoy the pension and also the benefits and availments you can have as SSS contributor,†he added.
Lacierda was reacting to criticisms against the move of the SSS to raise its members’ premiums after giving hefty performance bonuses to its officials.
He said the 0.6 percent increase in members’ contributions is just small but would ensure that the SSS remains viable.
Earlier, the SSS bared plans to hike its members contribution by 0.6 percent starting January next year to cut its unfunded liability and prolong its life by four more years.
The contribution will be raised to 11 percent of a member’s monthly salary from 10.4 percent.
The upward adjustment translates to an additional monthly contribution of P6 for every P1,000 increment in the monthly salary ceiling. The hike in premiums would allow the SSS to sustain its operations until 2043.
The move to increase members’ premiums drew flak from groups who believe this constitutes another burden to ordinary workers.
Bayan Muna party-list Rep. Neri Colmenares previously said that while SSS officials are getting fat bonuses, members are being burdened with higher contributions.
He said the SSS does not need to raise its premiums since its assets and investments amounted to P345 billion in 2010 while its yearly income is about P21 billion to P23 billion.
Colmenares has claimed that the pension fund also has collectibles worth P8.5 billion.
“It is the efficiency of the SSS management that really has to be increased to prolong the fund life of SSS,†he said.
Previous reports said SSS board members had been given about P10 million performance-based bonus based on an incentive system covering state-run corporations. Key SSS officials reportedly received bonuses ranging fro P968,000 to P1.4 million last year.
Deputy Presidential Spokesperson Abigail Valte said last Tuesday that they would ask the SSS to explain the granting of the bonuses to its board of directors.