SSS raises concern on higher contributions

MANILA, Philippines - The Social Security System (SSS) has raised concern about proposals to raise the monthly pensions of retired employees without a corresponding increase in the contributions of its active members.

However, Senate committee on ways and means chairman Ralph Recto believes that the SSS would be able to shoulder the increase given the amount of contributions it receives every year and the ratio of active members to retirees.

The Senate ways and means committee took up three bills during a public hearing conducted yesterday, all of which call for an increase in the monthly pension of retirees from the present range of P1,200 to P2,400 to P5,000 to P7,000.

Sen. Manuel Villar Jr., author of Senate Bill 2883, noted that the current pensions received by the retired SSS members are not enough to meet the barest of needs.

Under Villar’s bill, the monthly pension would go up to P4,000 on the first year of implementation and be increased by P500 a month until the rate reaches P7,000 a month.

The two other bills, Senate Bills 544 and 2964 filed by senators Jinggoy Estrada and Ferdinand Marcos, call for a lower increase to P3,000 a month initially, the rate of which would be increased by P500 a month until it reaches P5,000 a month.

None of the three bills calls for the increase in the monthly contributions.

Rizaldy Capulong, deputy chief actuary of the SSS, projected that the pension fund would run out of money by 2039 if the current proposals are implemented without a corresponding increase in contributions.

Recto said that it is still too early for the SSS to make any conclusions at this point and that he personally believes the pension fund could manage the increase in pensions.

“They have more than P340 billion in reserve funds and they’re making something like P25 billion additional every year at least for the last two years so I think it’s sufficient. That’s why we’re studying the possibility of increasing pensions for senior citizens,” he said.

Recto argued that there would eventually be more members of the SSS and based on his own calculations, there would be six members contributing for every pensioner.

As a pension fund, Recto noted that the contributions should not lie idle and should be placed in investments that would generate a decent yield for the SSS.

“If you invest it properly then you could earn more money to pay for the pensions and you would not have to take it from the contributions,” he said.