SSS appeals to Senate to implement initial P1k pension hike

The Social Security System (SSS) is attuned to the wishes of legislators for higher pensions in response to the prevailing public sentiment, which we also consider reasonable given the current cost of living. We request legislators to heed our appeal to how to best grant the pension increase without sacrificing the life of the fund, SSS Chairman Dean Amado D. Valdez said. The SSS appeals to lawmakers to consider its proposal to grant the P1,000 across-the-board pension (ATBP) increase in January 2017, and an additional P1,000 in 2022, or earlier. Lawmakers appear to be receptive of the proposal considering that it is doable, and will avert passing on the pension burden to taxpayers. "Immediately implementing the full P2,000 pension increase will put in peril the SSS funds. The P1,000 initial pension increase offers a more doable option towards the same goal of an additional P2,000 per month for pensioners," said Dean Valdez, who joined SSS officials in the hearing on pension-related Senate bills on Monday. SSS funds are currently projected to last until 2042 but will deplete in 2025 if the P2,000 ATBP increase is immediately granted in full. If the P2,000 ATBP hike is implemented in 2017, SSS would need an additional P64 billion for pensions for that year alone, and this amount is expected to grow every year. With the P1,000 initial ATPB increase, the SSS funds life will last until 2032. SSS can use the remaining funds for innovative investments to further boost its earnings, along with other measures, such as improving contribution collections, and generating higher cost savings from optimized operations. The SSS continuously explores innovations which include investing in corporations engaged in power, water and other utilities, and pursuing Public-Private Partnerships in developing infrastructure such as toll roads, which would provide stable long-term earnings for the funds of SSS members. Some sectors claim that SSS will never be bankrupt due to the government guarantee provided by the Social Security Law on members' benefits. This means, though, that taxpayers will eventually become chiefly responsible for funding SSS obligations amounting to billions of pesos every year. Dean Valdez said that while government subsidy remains a possible source for financing the P2,000 pension hike, it should only serve to supplement -- and not fully shoulder -- the funds needed for the increase. Releasing the P2,000 pension increase in two tranches offers a "win-win solution" since it allows the institution to increase the benefits of its pensioners without crippling the ability of SSS to maintain its long-term financial viability and continue fulfilling its benefit obligations to all members. "The new SSS management will do its best to explore better options and creative solutions to shore up SSS revenues from improved contribution collections and investments, and enhancing operational efficiency so that we can afford to increase our members' pensions and other benefits," Dean Valdez said.

Source: Philippine Information Agency

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