Duterte to push through with SSS contribution hike by May

MANILA, Philippines – Despite being warned that it's illegal, President Rodrigo Duterte is pushing through with the increase in monthly contributions of Social Security System (SSS) members starting May to compensate for the pension hike.

Duterte approved the P1,000-pension hike starting this year but with a corresponding 1.5% increase in monthly premiums starting May 2017. These twin decisions will affect more than 30 million SSS members and at least 2 million pensioners.

Palace Communications Secretary Martin Andanar said Duterte already made his decision after "carefully" weighing the problem.

"The President has carefully weighed both sides to solve the SSS impasse and he has already made a decision. The increase in the SSS pension effective this quarter will be financed by current contributions and investment income," Andanar said in a statement on Thursday, January 12.

Andanar defended the increase in premiums, saying it would be used to strengthen the long-term viability of the pension fund.

"The planned 1.5% increase in contributions in May 2017 will be used to improve the Investment Reserve Fund in order to generate higher yields for investments, and to further strengthen the overall viability of the pension fund so it can meet future obligations," he said.

Invalid, illegal

But senators from the Liberal Party have questioned the move. While lauding the pension hike, Senate President Pro-Tempore Franklin Drilon called the increase in SSS premiums "invalid" and "illegal."

"While the executive's decision to finally grant the long-awaited increase in the pension of SSS retirees is commendable, it should not be used to justify an increase in the premium payment," Drilon said in a statement.

Citing Republic Act No. 8282 or the Social Security Law of 1997, Drilon said the SSS is prohibited from recommending an increase in benefits that would require an increase in contributions.

The senator explained that the SSS can only implement an increase in benefits, subject to the approval of the President, "if such increase is based on the actuarial soundness of the reserve fund" and as "such shall not require any increase in the rate contribution."

"The increase in benefits of our pensioners must not come from a similar increase in the burden shouldered by current SSS contributors. The law is crystal clear in that regard," Drilon stressed.

In the past 16th Congress, former president Benigno Aquino III vetoed the law seeking to grant a P2,000-pension increase, saying it would have "dire financial consequences" for the entire SSS membership in the long run. – Rappler.com

Camille Elemia

Camille Elemia is Rappler's lead reporter for media, disinformation, and democracy. She won an ILO award in 2017. She received the prestigious Fulbright-Hubert Humphrey fellowship in 2019, allowing her to further study media and politics in the US. Email camille.elemia@rappler.com

image