New head, new hope?

The Social Security System (SSS) has a new leader in the person of Rolando Macasaet.

Macasaet is of course not new to social insurance and to running a state-run pension fund. He used to be the president and general manager of the Government Service Insurance System (GSIS) during the last four years of the Duterte administration.

He also has more than two decades of professional experience in financial services, banking, and public-private partnerships, and the private sector, having worked with the Philippine National Bank, Bank of Commerce, San Miguel Corp., PCI Bank, and the Private Infrastructure and Development Corp. He even worked overseas with the Bank of Montreal, with the Asian Infrastructure Investment Bank as director in Beijing, and with PNB as vice president in Los Angeles and ASEAN based in Singapore.

His educational background is likewise impressive. Macasaet earned his business economics degree cum laude and his Master of Business Administration from UP. He also finished an executive program in finance at Columbia University and a diploma in management at Harvard Business School.

He has also worked in a number of GOCCs, including the Philippine National Construction Corp., Skyway Corp., among others.

Macasaet has vowed to continue with the reforms and innovations and the path of growth started by his predecessor, personal friend, and fellow Zamboangueño Michael Regino and to work doubly hard to provide current SSS members and pensioners what is just and due to them without jeopardizing the financial protection of members and future pensioners.

But then again, one is only as good as his last performance.

Beginning last Jan. 1, SSS members’ contributions were increased to 14 percent from the previous 13 percent.

This was in accordance with the Social Security Act of 2018 which provides for a gradual increase in the contribution rate until it reaches 15 percent by 2025. According to SSS, the four-tiered contribution increase is to ensure the pension fund’s financial viability for the benefit of its members, pensioners, and their beneficiaries.

Under the new rate, employers would shoulder the one percentage point increase for employed members. The employee’s share will remain at 4.5 percent while the employer’s share will increase to 9.5 percent from the current 8.5 percent. For individually paying members such as self-employed, voluntary, non-working spouse, and OFW members, they will shoulder the 14 percent contribution rate since they have no employers.

There will also be an adjustment in the minimum monthly salary credit, from P3,000 to P4,000, while the maximum MSC will go up to P30,000 from P25,000.

Former SSS administrator Regino earlier said that based on the latest SSS actuarial valuations, the fund life would last until 2054 due to the reforms in the contribution rates. This, he pointed out, is an indicator that the pension fund has enough funds to support short-term and immediate financial needs of SSS members, pensioners, and their beneficiaries.

He noted that the SSS has already expanded the benefits of its members since 2019 such as the unemployment benefits and maternity benefits under the Expanded Maternity Benefit Leave Law although both these benefits have no particular source of funding.

He emphasized that an additional 22 years have been added to the SSS fund life with the help of contribution rate increases since 2019. Prior to the 2019 increase, the SSS fund life would have lasted until 2032 only.

But as I pointed out in a previous article, a lot of questions still remain unanswered.

For instance, back in 2017, labor groups said they want a deeper look into allegations of bribery and profiteering involving SSS officials. They also suggested cutting the perks and privileges of SSS officials and increasing the funds by running after employers who do not remit contributions.

There were also reports before of alleged conflict of interests and insider trading among investment operations officers managing collections and investing SSS’ multi-billion peso assets.

As pointed out in one newspaper article, “the SSS (and GSIS) are political institutions subject to political pressure by any administration in power. Expansion of benefits, even if revenues are not there, extension of funding even to non-contributing members and sectors (remember the botched Maharlika Fund plan) are yearly political pressures they must endure and are likely to give in.”

Back in September, SSS said that it plans to invest some of its resources into infrastructure projects to heed the call of Finance Secretary Benjamin Diokno to invest in infrastructure.

Why are members’ benefits being expanded only to make them pay for these later on in terms of additional contributions? Why is there even that danger of the SSS fund’s life being cut short early? And then there is the issue of the measly pension which retired members receive.

I previously suggested that our government should seriously look into how the SSS and our funds are being managed, and that the best managers be chosen to make sure that the funds are preserved.

Macasaet’s ability will now be put to a serious test.

Five years ago, then Social Security chair Amado Valdez said that raising the contribution rate of SSS members to 14 percent would make the pension fund for private workers at par with that of government employees.

Valdez noted that government retirees have higher pension because their contribution rate is at 21 percent of their actual salary.

But as has been pointed out earlier, SSS pension funds are being depleted because of increases in benefits without a corresponding funding source.

We cannot keep on increasing the contribution rates just to make sure that present members will receive something when they retire. Macasaet and his team must start thinking outside the box to find new ways to preserve the funds and improve the benefits without unduly burdening the members and their employers.

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