‘Win-win’ measures eyed for SSS

MANILA, Philippines - After drawing flak for the presidential veto of a measure granting higher pension to retirees, Malacañang is appealing to the public for better understanding as it seeks a “win-win” position for both the Social Security System (SSS) and its members.

Presidential Communications Operations Office Undersecretary Manuel Quezon III said that while disappointment over the veto could not be avoided, there were others who understood President Aquino’s reasons for vetoing House Bill No. 5842, which allows a monthly across-the-board increase of P2,000 in retirees’ pension.

“We should understand the President’s reasoning for this. The (pension) fund has the obligation to pay all of us SSS members... and our other benefits,” Quezon said.

“There’s a way to do it where it will be win-win for everyone while being responsible in ensuring the stability and actuarial life of SSS,” he pointed out.

The government has said the pension increase requires higher premiums from members. A senator said yesterday the increase in each member’s contributions could be about P100 a month.

Critics, on the other hand, claim the pension increase is not possible because the SSS is on the brink of bankruptcy. The critics say there is no need for an increase in members’ contributions if the SSS had invested its funds wisely.

SSS officials have also been criticized for their paychecks and fat bonuses.

“I think everyone’s lesson from this is, number one, the evaluation of numbers must be quite more realistic,” Quezon told radio station dzRB yesterday.

He said all sectors must work together even more to address all issues so that misunderstanding could be avoided.

“Based on the study of SSS, to match the P56 billion to be released for the proposed P2,000, the sum total of what you have to pay must increase by 40 percent to 44 percent,” he said. “And then we would have to start considering that there might be need to provide additional subsidy or funds from the national government for this and then that would have an effect on other programs.”

“It’s quite complicated to discuss but it’s possible,” Quezon said.

In November, Speaker Feliciano Belmonte Jr. said the House of Representatives passed HB No. 6112 as twin or sister bill of HB 5842 to make sure that the SSS would not go bankrupt with the P2,000 increase in the pension of senior citizens.

Belmonte explained they needed to approve another bill side by side with the bill increasing the pension of senior citizens because the size of the contribution to the SSS was way out of proportion to the pension proposal approved by the House and the Senate.

However, the Senate did not pass HB 6112 but only the proposal that would raise the pension. Aquino said he did not have a choice but to veto the bill because the SSS could not afford it.

Belmonte said a concomitant bill would enable the SSS to carry on and improve its actuarial life although it would involve raising the members’ contribution. Belmonte added HB 6112 would rationalize the powers, duties and accountabilities of the Social Security Commission and amend the Social Security Act of 1997.

Belmonte said the bill would empower the SSS board of trustees “to take stock of their actuarial situation and approve certain things.”

“In the case of GSIS, approval of the board is enough. In the case of SSS, the approval of the president is needed to increase the contribution,” Belmonte maintained.

“We’re not advocating about removing the approval of the President, we just want to empower the board,” he added.

How are SSS, GSIS being run?

Quezon said it was interesting to discuss how both the SSS and GSIS were being run.

“This must be studied by all those affected. For example, if you’re paying SSS, are you willing to increase the percentage of deduction from your salary and for the employers, are they willing to match that? Because the system is partnership, right?”

He said he hoped lawmakers would begin studying the matter, adding that it might now be a task left for the next Congress to take up and finish.

Quezon said it would be okay to increase the pension of the retirees if there was a clear way suggested to offset the payout that would amount to P56 billion. Such a payout figure would result in a deficit for SSS.

“There is no such bill accompanying it. So what happens is – it’s only cash out and because of that the actuarial life of SSS will be shortened and that would be very unfair to those in line who are also paying,” Quezon said.

“And I think the very encouraging thing – you know, of course, bad news sells – but many of the people also understand,” he said.

“We would all want to get more. But, at the same time, the people understand that the management of fund must also be responsible and careful to make its life longer because there are a lot more who are in line,” Quezon said.

Aquino defended his decision on Friday, saying all factors must be considered before the pension for retirees could be increased. The President said he has tasked agencies to study if a P500-increase would be feasible.

The President said that for every one peso contribution, SSS would have to pay back P6 to P15 and thus the need for the pension fund to make long-term investments and not deplete its resources.

Quezon said SSS members would also get other benefits from their contributions while paying for the operations of the firm as well.

Bonuses justified

He also said the bonuses that SSS officials were getting were justified based on their performance.

“These are two separate issues. Number one, because of the reforms that have been put in place, the handling of government funds and the existence of GOCCs are really dependent on performance,” he said.

“Let’s remember that bonuses and allowances are performance-based. And what is the proof of the performance? Under the Aquino administration, the life of the SSS has been extended by three years. So that’s a concrete proof of both prudent management and achievement,” he explained.

He said SSS had also been providing other benefits and “it’s a basic principle of modern government – and you see this, for example, in Singapore – that if we want to have good performance, we have to be in a sense willing to reasonably pay for it.”

While funds involved were government funds amounting to billions of pesos, there should be an incentive for people to not only do their job well but to do it honestly.

“If these people, for example, had chosen just to stay in the private sector – let’s say, to manage the pension funds of a private firm because there are... pension funds of private companies – they would be earning much more than what the SSS pays out for a performance-based track record,” Quezon said.

“I believe we must ask ourselves: ‘are we willing to pay for performance and for prudent management?’ I believe that the SSS can prove that they have performed in this level,” he pointed out.

He said everyone should “commit and help the government” to ensure that everyone is paying his due so there would be basis for allowing higher pension.

“No one wants to keep the benefits low, but we have to realize that collections can still be improved, and that once they reach certain levels then there is added security to ensure payouts in the future,” he said.

Who’s heartless?

Quezon also scoffed at accusations that Aquino was being heartless when he rejected higher pension for retirees.

He said the administration has set in place numerous pro-poor programs like the mandatory Philippine Health Insurance Corp. coverage for all senior citizens.

He said as of June 2015, more than 4.8 million senior citizens had been enlisted under the healthcare program through amendments to the 2010 Expanded Senior Citizens Act signed by the President in 2014.

Quezon said indigent senior citizens were also receiving “augmented social pension” amounting to P500 under the 2010 Expanded Senior Citizens Act signed in February of 2010.

The age to qualify for indigent senior citizens’ pension also was adjusted, Quezon said, noting that the Department of Social Welfare of Development included those 65 years and above in 2015 “so in that year alone, 760,736 indigent senior citizens were served.”

From 2011 to 2014, the DSWD prioritized senior citizens aged 77 years and above. Moreover, SSS pension for retirees increased by five percent beginning 2014.

“And, together with the national government, there has been a P7-billion educational assistance loan program that was started in 2012. And, as of June 2015, over P3.1 billion worth of loans have been disbursed for 67,299 qualified student beneficiaries,” he revealed.

Meanwhile, Sen. Sergio Osmeña III said the “most painless and intelligent” way to raise enough money to cover the P2,000 hike in retirees pension is simply to require members to contribute P100 more to the SSS.

A P100-hike in contribution every month would mean an additional P3 billion a month or P36 billion a year, he said.

He added the President did the right thing “technically, financially” when he vetoed the measure “because the Senate did not include raising the funds to cover for the estimated P46 billion a year needed.”

 “The most painless and intelligent solution is to raise the contribution by P100 a month,” Osmeña said over dwIZ.

In Davao City, the Anakbayan youth group said Aquino’s offer of P500 hike in retirees pension instead of P2,000 was “an insult” to Filipinos.

“Why is it that millions of pesos are being given away as bonuses for SSS officials and yet nothing is available for senior citizens?” said Anakbayan national chairperson Vencer Crisostomo. – With Marvin Sy, Edith Regalado