SSS upped pensions 3x in 14 years
This refers to Rudy Coronel’s letter titled “Retirees’ benefits deserve review after third SSS premium hike” (Opinion, 1/22/14). For the benefit of the SSS (Social Security System) members, allow us to make the following clarifications:
SSS actuarial valuations study the fund’s long-term viability amid demographic factors such as life expectancy, aging of population and retirement age, as well as projected inflation, interest rates, salaries and other economic factors. These valuations, conducted every four years, help gauge SSS’ capability to increase benefits without compromising its actuarial life.
At present, SSS funds are projected to last until 2043, factoring in the additional four years resulting from the contribution increase effective January 2014. To ensure that new and currently contributing members can look forward to pensions at the end of their working years, SSS aims to gradually lengthen the current 29-year fund life up to 70 years, in line with international standards on fund perpetuity.
Based on the latest calculations, unfunded liability stood at an estimated P1.1 trillion as of 2011. It is helpful to recall that from 1980 to 2003, pension hikes of up to 20 percent were implemented 21 times across-the-board, almost on a yearly basis. But in the same 23-year period, the contribution rate was stagnant at 8.4 percent, before it was raised to 9.4 percent in 2003 and to 10.4 percent in 2007 to avert fund depletion. The raising of the contribution rate and the maximum monthly salary ceiling are structural reforms needed to narrow the gap between contributions and benefits, bring down unfunded liability and attain fund perpetuity.
SSS continues its campaign to improve collection from companies by taking legal action against delinquent employers. We have also streamlined our operations so that separate, dedicated units are now focused on large and branch employer accounts for better monitoring of their SSS compliance.
SSS used to administer the Medicare Program for private sector workers before it was transferred to the Philippine Health Insurance Corp. (PhilHealth) in 1999. Medicare payments were already clearly differentiated from SSS payments in the members’ records. While the Medicare contributions were duly turned over to PhilHealth, there was no need for the “commensurate transfer” of SSS employees since PhilHealth operates as an independent agency with its own mandate,
manpower and resources.
On a parting note, we beg to disagree with Coronel’s claim that his pension amount remained the same since his retirement 14 years ago. Pension hikes of 10 percent were granted across-the-board in 2000, 2006 and 2007, which means Coronel’s retirement benefit has been increased three times within the past 14 years.
—MARISSU G. BUGANTE,
vice president,
Public Affairs and
Special Events Division,
Social Security System
