Duterte approves P1,000 hike for SSS pensioners
President Rodrigo Duterte has approved an increase in the pension of some 2.2 million beneficiaries of the state-run Social Security System but with a corresponding increase in the contribution of its members.
In a press conference, Presidential Spokesperson Ernesto Abella said that during the Cabinet meeting on Monday,
Duterte gave his nod for a P1,000 pension increase this month, with a corresponding 1.5 percent contribution rate hike in May 2017 and increase in monthly salary credit to P20,000 based from P16,000.
"He seeks to fullfill a social contract with the Filipino people specially the elderly and the poor, to give them their best lives in service while exercising fiscal responsibility, to ensure the economic sustainability and protect those who invested in the nation's future," Abella said.
SSS chairman Amado Valdez said the government is also planning tor increase the pension by another P1,000 by 2022 before Duterte steps down from office or in 2018 if cash flow will allow.
But he said the contribution should also increase from the current 11 percent to 17 percent. This will be implemented on a staggered basis, Valdez added.
When SSS implements the first tranche of contribution of 1.5 percent by May 2017, or 12.5 percent from the current 11 percent contribution rate, this means in peso value, the additional total contribution to range from P15 to P740 equally shared by employer and employee, Abella explained.
The funds covering the increase of the pension will be through current contributions and investment reserved fund, he added.
"The president is not amenable to using taxpayers’ money to fund pension increase since the SSS is a private pension fund. Its total assets are P487 billion as of October 2016 and its fund life is until 2042," he said.
"Even with the thousand peso increase, the fund life will continue until 2040 by May 2017 when the contribution rate and increase in monthly salary credit is implemented."
To ensure sustainability, SSS is setting in place legal action plans to reduce contribution delinquency, he said, citing intensify legal collection and referred delinquent and non-compliant employers.
Another action is executive interventions needed to improve collection through the issuances of Executive Orders, he said.
Duterte's economic managers earlier warned that SSS might go bankrupt if the P2,000 across-the-board pension hike would be approved without raising the contribution by up to 17 percent. Celerina Monte/ DMS