SSS goal is to extend fund life to perpetuity
This is in response to issues raised about the Social Security System (SSS) in Bernardo V. Peralta’s letter titled “SSS response on pension only raises more questions” (Opinion, 1/7/13).
1. The SSS aims to bring fund life back to perpetuity, or a period of at least 70 years, to ensure that new members can look forward to pensions come retirement. The 1-percent contribution rate and P16,000 maximum monthly salary credit, effective January 2014, are projected to add four years to the SSS’ fund life, and the fund is now projected to last until 2043. Based on the latest actuarial valuation, under the present circumstances, the ideal contribution rate to attain fund perpetuity is 14 percent. The recent increase is part of the small and gradual steps the SSS is taking toward this end.
2. Based on the 1980 Actuarial Valuation, the SSS fund was projected to last in perpetuity. However, from 1980 to 2003, certain events placed considerable strain on the fund, particularly the across-the-board pension hikes of up to 20 percent that were implemented 21 times. The Social Security Act of 1997 also imposed minimum pensions of P1,200 for members with at least 10 credited years of service (CYS) and P2,400 for those with at least 20 CYS. Despite these benefit increases, the contribution rate remained at 8.4 percent within the same 23-year period. These resulted in an alarming 16-year fund life in the 1999 Valuation Results. Since then, corrective measures continue to be carried out by the SSS to prolong the fund life—now projected to last 29 years—and eventually reach the goal of 70 years.
3. At present, the SSS collects the full amount of loan balance. Nevertheless, the SSS has an ongoing study to come up with an acceptable recommendation or guidelines on writing off loan balances that may be considered immaterial or insignificant.
4. Cases of “members who did not borrow receiving notices of collection” may be caused by the inadvertent use of another person’s SS number, or the fraudulent filing of loan applications by an employer or company representative. There are also members who deny filing a loan application but verification shows that they had indeed borrowed from the SSS. Those who dispute SSS loans in their accounts may file a letter of complaint and an affidavit stating that they did not avail themselves of the loan at any SSS branch so that we can further verify their concern.
5. The SSS requires claimants for survivorship benefits to submit a death certificate duly certified by the Local Civil Registry, and conducts “Fact of Death” investigations for questionable claims. The Annual Confirmation of Pensioners or “Acop” program also helps protect the fund from fraudulent claims by requiring pensioners to present themselves every year to the SSS branch or their depository bank during the member’s birth month to confirm if they remain eligible for pension.
—MARISSU G. BUGANTE,
vice president,
Public Affairs
and Special Events Division,
Social Security System
