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SSS clarifies issues related to pension hikes

01:55 AM March 15, 2016

MAY WE comment on issues raised in the following articles: “SSS stonewalls on pension increase veto” (Opinion, 1/22/16) by Amando Doronila; “SSS, corruption, and surveys” (Opinion, 1/28/16) by Bernie Lopez; “No ‘papogi’ in SSS pension increase” (Opinion, 1/26/16) by Teddy Casiño; and “Local stocks recovering lost ground” (Business, 1/26/16) by Den Somera.

The Social Security System has been consistent in its position that the viability of its funds has to be considered in assessing whether or not benefits can be increased. As much as we want to grant higher benefits to our pensioners, we have a legal and moral obligation to keep the SSS solvent at all times.

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The SSS does conduct a regular review of its benefits to check if they remain responsive to the present needs of members. We can propose a change in the benefit levels even without legislation as long as the SSS funds are intact to cover the system’s cash needs.

With regard to the salaries of its executives, the SSS follows the applicable salary scales set by the Governance Commission for GOCCs (government-owned and -controlled corporations). And bonuses and other incentives are subject to the commission’s review and approval.

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Also, our compensation package is limited to the following categories under the Total Compensation Framework established by Joint Resolution No. 4 s. 2009 pursuant to the GOCC Act of 2011:

  1. basic salaries, including increments;
  1. standard allowances and benefits (given to all employees across agencies);
  1. specific-purpose allowances and benefits (given under specific conditions, based on actual performance of work); and
  1. incentives, which are rewards for loyalty to government service and for exceeding performance targets

Recent developments about our assets disposal should dispel the notion that SSS assets have remained idle since the release of the 2014 Commission on Audit report. In the second half of 2015, the SSS earned P274.5 million from the lease and sale of SSS real estate properties. The SSS has placed some properties in the auction block, but it has retained some select prime properties as part of the agency’s long-term strategy, given the expected appreciation in value of these assets.

In answer to the alleged inconsistencies in the computed deficit that will arise from the proposed P2,000 across-the-board increase, what the SSS and Malacañang showed to the public was based on calculations of the projected incomes from investments and contributions that the SSS expects to collect in 2016. The calculations took into account the updated number of SSS pensioners as well as the amount of divestments should the increase be approved to cover the additional benefits.

It is unfortunate that the SSS was denied of the opportunity to discuss the repercussions of the proposed increase (later approved by the House of Representatives on third reading without a debate). Despite categorical requests, the SSS was not given a chance to present the results of its actuarial study that looked into the impact of a P2,000-additional benefit. The study could have helped our legislators, especially those who were not able to give it a careful review, to do the necessary changes for a feasible compromise. The House-approved bill was passed on to and adopted in toto by the Senate, but it has legal issues, such as conflicting provisions and stipulations, that create inequity and pension distortion.

The figure presented by the SSS to the Senate in 2015 was based on the agency’s financial status as of 2014. Back then, we projected a higher income and a lower deficit (P4 billion) due to the favorable investment environment in 2014. Also, we only had 1.9 million pensioners then; at present, we have 2.15 million.

Contrary to Casiño’s view on this issue, the SSS could have easily agreed to the pension increases, but it would have been a reckless move given the debilitating impact it would have on the viability of the SSS funds. Our refusal to give in to the demand for the increases may have been unpopular, but not a heartless one. We would have failed on our mandate if we fail to safeguard the interest not only of our current pensioners but also the 31 million members who will retire in the future.

The SSS has not stopped collecting from delinquent employers. In fact, SSS employer delinquency has shrunk to P13.5 billion as stated in the 2013 COA report. Also, through legal actions, we were able to collect more than P460 million from at least 7,000 employers from 2010 to 2015.

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The SSS’ actual contribution collections, as against the amount due for collection, have significantly improved. In 2014, the collection efficiency ratio was almost 90 percent with contributions totaling P120.68 billion against the P134 billion in collectibles.

Amid the low-market environment last year, the SSS return on investment went as high as 7 percent, outperforming benchmarks such as the rate for treasury bonds and treasury bills.

We urge our critics to look at our historical performance, which they can check in the agency’s past annual reports and COA reports. We admit that there’s still room for improvement, and “pain points” remain, needing resolution despite our financial achievements over the past few years. But we are glad to report that the SSS funds are more stable now compared to previous years due to prudent management, complemented by the increased compliance of employers and higher number of paying members.

Marissu G. Bugante is SSS vice president for public affairs and special events.

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TAGS: opinion, pension, pension hike, pensioner, Social Security System, SSS
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