Economic execs want higher SSS contributions with P2,000 pension hike

Economic managers have urged President Rodrigo R. Duterte to implement higher Social Security System (SSS) collection charges to offset the expected losses due to the proposed P2,000 pension hike.

"We strongly recommend that any improvement in pension benefits be accompanied by an upward adjustment or restructuring of the contribution rate from employee members and their employers, as well as self-employed and voluntary members," three cabinet secretaries said in a joint statement emailed to reporters on Sunday.

The parties behind the statement are Finance Secretary Carlos G. Dominguez III, Budget Secretary Benjamin M. Diokno, and Socioeconomic Planning Secretary Ernesto M. Pernia.

They were reacting to proposals by the Congress — Joint Resolution No. 5 of the Senate and Joint Resolution No. 10 of the House of Representatives — for the SSS to hike its monthly payments to some 2.2 million member-pensioners.

The House Committee on Government Enterprises and Privatization approved the measure in September, while the Senate last week passed a resolution calling for an immediate increase.

In a memorandum to the President dated December 15, the economic managers said the proposal "may adversely affect the Republic's credit rating," and that "SSS would be bankrupt with no funds for other members in the future."

"While we recognize the thrust of the joint resolution to promote the well-being of the country's private sector retirees... any increase in pension without increasing member contribution and expanding its membership base would introduce severe fiscal issues, and should be discouraged," they said.

Under the memorandum, the secretaries recommended that Duterte increases member contribution from the current 11 percent, to 17 percent.

"We do not believe it is unfair to ask for this increase as pensions have increased 22 times while the contribution rate has only increased three times since the establishment of the rates in 1980," they added.

To recall, former President Benigno S.C Aquino III in January refused to sign the bill hiking the monthly pension to P2,000, saying it would "compromise" the entire membership of the pension fund.

"This proposed resolution is foreseen to cut the actuarial life of the fund by 14 to 17 years from 2041 to 2025-2028 and will result in approximately P64 billion additional pension every year," Duterte's economic team said.

"This has detrimental effects in the financial position of SSS and the viability of its business model," they said.

Officials of the SSS in January also said it would incur a P26-billion net loss should the proposal push through. — Jon Viktor D. Cabuenas/BM, GMA News