MANILA, Philippines – The Employers Confederation of the Philippines (ECOP) expressed concern yesterday over a proposal in Congress hiking the monthly pension received from the Social Security System (SSS).
In a position paper released yesterday, ECOP said all bills in Congress that seek to increase SSS benefits fail to ensure the sustainability and viability of the fund and may lead to an increase in premium contributions.
“In this connection, ECOP has consistently opposed any drastic or unwarranted increase or adjustment in premium contributions of the different adjustments on the premise that benefits would not be increased until such time that the fund is viable enough to assume such increases,” the ECOP said.
According to the ECOP, all bills in the House of Representatives and the Senate, except Senate Bill 63, fail to amend Sec. 4 of the Social Security Law.
This provision prescribes the SSS to provide “feasible” increases in benefits every four years, provided that actuarial soundness of the reserve fund should be guaranteed, and that such increases will not require any increases in the rate of contribution.
“While the bills seek to improve the benefits received by pensioners, none of them except Senate Bill 63 provide a safety clause that such increases shall be subject to or dependent on, actuarial valuation to protect the long term viability of the fund,” ECOP said.
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“It is apparent that an inherent conflict would arise between the proposed amendments and the existing provision of Sec. 4, which unless reconciled would render the bills ineffective,” it added.
ECOP said unless government subsidy is provided, the “hefty” increases in benefits, as mandated by the bills would make the SSS fund unsustainable and inevitably lead to increase in premium contributions.
According to the SSS, the implementation of the pension hike would shorten the life of its fund by 13 years, from 2042 to 2029.
The employers organization said its position stands with the prescription of Sec. 4 of the Social Security Law, which states that increases in benefits should not require an increase in the rate of contribution.
There are currently a total of five bills in the Senate and 15 bills in the House of Representatives that propose for a P2,000 across-the-board increase in monthly pensions.
This would increase monthly pension to P3,200 to P4,400 for pensioners from the current P1,200 to P2,400 a month.