“There has to be a way of increasing the meager pension being received by retirees who worked hard their entire life but are now receiving peanuts from the SSS.”
By MARYA SALAMAT
MANILA – Filipino pensioners have moved one step closer to getting their monthly pension increased by at least P2,000 ($43) from its current “pitiful” minimum amounts. All they need now is for the top executives of the Social Security System (SSS) led by its president and CEO Emilio De Quiros Jr. to be open to it, and for Congress to finalize the draft law, which, by now, has been approved by the House of Representatives and the Senate Committee on Gov’t Enterprise and Privatization.
“It is up to Congress to summon the political will to do what should have been done by SSS two decades ago—increase the pension of our senior citizens and allow them the opportunity to enjoy a little comfort in the remaining years of their lives,” said Bayan Muna Rep. Neri Colmenares. He is the lead author of House Bill 5842 of which a counterpart measure in the Senate was passed last Tuesday August 18 under the leadership of Sen. Cynthia Villar.
Workers from Kilusang Mayo Uno (KMU) immediately welcomed the news. “We are glad that the P2,000 hike in SSS pensions has moved closer to being approved. This move is long overdue and would give immediate relief and recognition to the country’s retired workers,” said Roger Soluta, KMU secretary-general.
House Bill 3851 together with HB 4903, approved by the House of Representatives as HB 5842 on June 9, 2015, seeks to provide immediate relief to the mostly impoverished SSS pensioners. Colmenares said that even though it does not provide for the P5,000-P7,000 ($107 to $150) minimum needed by the pensioners, the modest increase will definitely make a difference for the pensioners especially those in their twilight years.
The bill is also premised on benefiting future pensioners.
‘If there’s a will, there’s a way’
After decades of working and paying the government monthly premiums for their “social security,” Filipino pensioners often find to their disappointment that they would receive only a meager amount of pension when they retire.
The lowest paid pensioner receives a pitiful P1,000 ($21.42) per month while the average pension is P3,157 ($68), based on data presented by the SSS to the Senate Committee on Gov’t Enterprise and Privatization last May 26. The minimum pension of retirees is only P1,200 ($26) for those with 10-year contribution and P2,400 ($51) for those with 20-year contribution.
Almost half or 46.6 percent (712,268) of pensioners were receiving such minimum amounts of pension in 2010, according to an SSS letter signed by VP Rizaldy Capulong on January of 2012.
“The minimum pension is grossly inadequate based on the P1,008 ($21.60) per day needed by a family of six in the National Capital Region,” Bayan Muna Rep. Neri Colmenares said in pushing for an increase in monthly pension of retirees.
In the face of public clamor for a pension hike, SSS implemented a 5 percent pension increase in 2014, but only to existing pensioners effective June that year.
In a position paper addressed to lawmakers, Bayan Muna Rep. Colmenares called the said hike a mere “token” as it amounts to only P50 to P60 ($1.07 to $1.30) increase per month for those receiving minimum pension.
It is “not even enough to buy one piece chicken joy. This does not even come close to what is actually needed by pensioners for their basic needs including maintenance medicine,” Colmenares said.
Worse, the SSS also increased the contribution or premium from 10.4 percent to 11 percent on January 2014.
According to SSS, this translates to P6 increases for the minimum contributor and P90 ($2) for the maximum contributor. But as the workers’ groups have been saying, even this amount is a big imposition given that wages have not substantially increased and the prices of most basic goods aside from other deductions are on the rise.
For the minimum wage earner of P481/day ($10.30), for example, the hike in SSS contribution means an additional deduction of P31.75 ($0.7)from his or her monthly wage. Along with other increased contributions and payments approved at the same time such as the hike in Philhealth premium, Colmenares said, this represents another burden to the already inadequately paid workers.
SSS President and CEO Emilio De Quiros Jr. defended the hike in premium saying the pension has been increased 21 times for the period 1980-2007, a claim which pensioners publicly doubted. Colmenares said most pensioners are in support of the bills proposing a hike in pension, and they have even sent numerous letters/messages and petitions of support to them.
SSS has money for executives’ bonuses, but only gloom and doom for pensioners?
De Quiros and the SSS have been against increasing the retirees’ pension since Colmenares proposed it in 2011. De Quiros claims the fund life of the SSS would be shortened to just 13 years if the pension were increased by P2,000 ($43).
“In a choice of helping lengthen the lives of its pensioners or that of the SSS fund, the SSS clearly chose the latter,” Colmenares said in a position paper with Sen. Villar.
Yet, there seems to be a disconnect between the SSS executives’ reports on the social fund’s situation and their reasons for refusing to increase pension. Colmenares said the SSS does not portray an institution that seems to be in need of funds.
“It does not exert effort to go after unremitted premiums by employers, it does not even bother to collect the fines imposed by courts on those found guilty of violating the SSS law. Worse, it grants its board members not only P10 million ($200 thousand plus) in bonuses but also more than P200 million ($4.3 million) in retirement package in 2009. Its services to members have been dismal for years despite the average of P7 billion ($150 million) in operation expenses for more than five years,” Colmenares said.
SSS has also been reporting solid financial results. Based on SSS reports as of December 2013, assets and investments doubled in 10 years. The average investment yield rate is more than 8 percent, meaning it is outperforming benchmark in the past six years.
SSS in 2013 also reported the highest investment income levels in past 10 years and higher income to revenue ratios since 2008. Contributions less benefits also yielded positive variance since 2005. In fact, their investment income in the last three years ranges from P32 billion or higher.
No shortage in proposals to benefit pensioners, SSS members
In the face of De Quiros’ worries for SSS fund life, both Sen. Villar and Bayan Muna Rep. Colmenares are now saying there is more than enough time to look for solutions, if only the SSS is willing to work for it. It is not as if we will do nothing about it, the lawmakers said.
The more important and urgent task, they said, is to approve the pension increase, and then put in place some mechanisms so that SSS will be up to its mandate, and that is “to manage a sound and viable social security system which shall promote social justice and provide meaningful protection to members and their families against the hazards of disability, sickness, maternity, old age, death and other contingencies resulting in loss of income or financial burden.”
Villar and Colmenares said a P2,000.00/month increase is “viable, and necessary, and its impact can be mitigated after 2016.” They proposed some steps which the SSS and the government can do for its pensioners. They urged the government particularly the SSS to:
• “More efficiently handle SSS investments and assets after 2029.”
With prudent handling of the SSS’s investible funds, it is expected to earn better and not necessarily from increasing SSS premiums. As of March 2015, SSS already has P427B ($9.15B) total investments and P444 billion ($9.52 billion) worth of assets.
• Penalize and collect billions in unremitted premium contributions and penalties from delinquent employers.
According to COA Executive Summary Report in 2013, there are 61,260 delinquent employers with P13.5 billion ($289 million) unremitted contributions and penalties. In reports from the Senate hearings in 2004 during the discussion on the SSS condonation law, the unremitted contributions run up to P90 billion ($1.93 billion).
• Subsidize the pension system, if necessary, from the government budget similar to the government subsidy for the AFP and PNP.
Colmenares and Villar found it unjust that military and police officers get subsidized while ordinary SSS pensioners who they recognize as poorly paid workers are deprived of the same government support.
In a statement, the Kilusang Mayo Uno said the SSS should be able to shoulder the proposed pension hike, even as it also welcomed Sen. Cynthia Villar’s proposal of allocating funds from the General Appropriations Act to fund the hike.
“If there’s a will, there’s a way, and there has to be a way of increasing the meager pension being received by retirees who worked hard their entire life but are now receiving peanuts from the SSS. If allocating funds from the (General Appropriations Act) GAA is the way to do this, then so be it,” said Roger Soluta, KMU secretary-general.