Actuarial studies dictate hikes in SSS benefits

This is with regard to some of the points raised by Mafeo R. Vibal in his letter, “PhilHealth, SSS, GSIS ‘losing sight’ of retirees” (Opinion, 10/25/14), about the regular review of retirement benefits as mandated by the Expanded Senior Citizens Act of 2010.

The regular review of benefits for the retirees from the private sector is part of the quadrennial actuarial valuation study on the SSS fund life. Every new benefit increase is contingent upon the results of this study, which need to show an improved financial sustainability. This means the SSS can finance a higher retirement pension, for instance, as long as the actuarial report presents that the increase will not adversely affect the ability of the fund to support future benefit obligations.

Since 1980, the SSS has carried out 22 across-the-board pension hikes (the most recent one was in June 2014), while it has only adjusted its contribution rate twice. SSS actuarial reports revealed that this gap between the amount of benefit payouts and income from sources such as the members’ contributions has shortened the SSS fund’s life. To resolve this, the SSS had to undertake structural reforms to continuously provide benefits and net higher revenue.

These structural reforms included raising the monthly salary credit to P16,000 and the new contribution rate of 11 percent that all took effect in January 2014. Just shortly after these were implemented, pensions of about 1.9 million SSS members were increased by 5 percent this June 2014. Also, the SSS fund’s life has been extended to three more years, which is currently projected to last until 2042.

Reforms undertaken by the SSS are continuously rendering benefits to its members, who can now save and get more meaningful amount of benefits than the ones they were used to in the past.

We take offense at Vibal’s statement that the benefits of senior citizens are sacrificed “on the altar of astronomical bonuses” favoring our officers. Our financial statements and accomplishment reports are open to public scrutiny as confirmed by the Governance Commission for GOCCs. These reports validate our continuous efforts to improve the benefits of our pensioners while ensuring the financial viability of the pension fund.—MARISSU G. BUGANTE, vice president, Public Affairs and Special Events Division, Social Security System, East Avenue, Diliman, Quezon City