SSS earnings must go to members' benefits

The news about plans of the Social Security System (SSS) to implement this year a hike in members’ monthly premium contributions went largely unnoticed. Understandable, considering so many things are happening in the country, from the ongoing Corona impeachment trial to Monday’s magnitude 6.9 earthquake in Negros provinces.

To us salaried workers, it came as an earthshaking development to learn about the planned increase in SSS contributions that will cut deeply into our thinning monthly paycheck. In a press conference last week, SSS president and chief executive officer Emilio De Quiros Jr. announced the SSS plan to raise members’ contribution rate to 11 percent of a worker’s monthly salary credit (MSC) from the existing 10.4 percent.

As it is now, our monthly take-home pay is automatically deducted 10 up to 32 percent in withholding tax from our gross earnings. Then, we have deductions also from SSS, PhilHealth, and Pag-IBIG. So when you do the math, we could hardly take any more deductions from our take-home pay.

The most disturbing part of this plan, as revealed by the SSS chief, is that the ultimate goal is to raise the contribution rate to 15 percent implemented gradually every year or two. According to him, the planned hike in SSS contributions would be split between employers and employees.

The last time the SSS raised its contribution rate was in January 2007, shared by both employer and employee. De Quiros disclosed that an increased contribution rate is part of the SSS reform program. This is why, he said, the pension fund has supposedly started talking to members, including employers, to explain the plan so that it may be implemented preferably this year.

Who exactly are the employee-members and employers that the SSS has been conferring with on this planned hike in premium contribution? We could only wonder.

A check with the Bureau of Labor Employment Statistics revealed there are about 15.4 million minimum wage earners in the private sector all over the country. This number does not include the self-employed and private household workers. I’m not sure about the reported SSS membership of around 29 million. This number might include existing SSS retirees/pensioners.

Since last week when the SSS announced this plan, there has been no immediate reaction from the usually vociferous militant workers’ unions as well as moderate labor groups. Nothing has also been heard from private sector employers on this plan that could raise the cost of doing business. Not a word even from any member of Congress if only to squeeze out media mileage on the issue. There seemed to be a failure of communication here.

There should have been wider dissemination of such major announcement from the SSS. With such plan that would deeply impact millions of employees and workers in the private sector, the reported plan of the SSS to hike members’ contribution should best be discussed in public hearing and not just through mere press conference.

Or perhaps, De Quiros meant they at the SSS have talked with employees and employers groups as represented in the SSS Board. But that is a very limited kind of consultation, if ever. It would have been more believable if the SSS chief invited representatives from those groups to his press conference last week. It would be best to hear directly from them what is their stand on this SSS plan.

As if it was any comforting news to us, De Quiros justified this increase in the contribution rate saying it would also mean higher benefits for us SSS members. As per De Quiros, this should increase pensions received by retired members by at least 10 percent.

But De Quiros did not say if there would also be similar increase in other SSS benefits that its members may also avail of such as housing and salary loans, sickness, disability, death, and maternity benefits. SSS retirees also receive 13th month pension and dependents’ pension for each minor child no more than 21 years old prior to retirement, but not exceeding five.

While we have no quarrel on the good intentions of this planned hike in members’ contributions, it behooves the SSS management to explain why they need to increase this if only for this purpose. Is SSS not earning more than enough out of its investments of the Funds it manages for its members?

These questions beg to be answered especially in the latest statements from top executives of SSS in reply to the reported probe ordered by the Commission on Audit (COA) on the sale of SSS P5.69 billion Meralco shares in 2009. Getting ahead of the COA probe, the SSS reported it earned “a huge profit of P2.37 billion” out of this questioned transaction “that was completed in accordance with the guidelines and investment principles of Social Security Law.”

This was highlighted by Edgar Solilapsi — SSS executive vice president-Investments Sector, and Rizaldy Capulong — SSS vice president and deputy chief Actuary, in a Letter to the Editor sent and published in The STAR yesterday. If this was the case, then how come De Quiros still wants to push for increase in members’ contribution when the Funds have been well invested and earning profit all this time?

Speaking of profit, President Aquino received at Malacañang Palace last Monday a total of P19.283 billion in various checks coming from dividend earnings turned over to the National Treasury by government-owned and controlled corporations (GOCCs) and government financial institutions (GFIs).

Under the Dividends Law of 1994, GOCCs and GFIs are mandated to remit to the national coffers half of the income earned in each fiscal year. In his speech, President Aquino cited these billions of pesos of dividends could provide funding for the government’s many projects and social services.

The SSS is considered a GFI. However, SSS was not one of those GFIs that turned over any dividend. This is precisely because the dividends must go back to its members whose monies were invested by SSS and earned profit.