PENSIONERS rejoiced while employers and active members of pension fund Social Security System (SSS) were wary of the P1,000 increase in monthly pension and the corresponding increase in premium contributions.
Leonora Maghinay, 73, said the P1,000 increase in her monthly pension, currently at P2,000, would help pay for her maintenance medicines and daily expenses.
“It is good that we will get a P1,000 increase in our pension,” said Maghinay, a resident of Cagayan de Oro City in Misamis Oriental province.
Entrepreneur Jane Villamor, on the other hand, was not very pleased.
“Small business owners like us rely only on our daily income and we can only afford according to our bracket of SSS contributions,” she said.
Villamor said the adjustment in premium contributions would put a strain on the finances of employers, who pay part of the contributions of their employees.
Presidential spokesperson Ernesto Abella announced in a press conference Tuesday afternoon that President Rodrigo R. Duterte has approved a P1,000 across-the-board increase in monthly SSS pensions as well as a corresponding 1.5-percent yearly increase in premium contributions.
From the current 11 percent, the contribution rate would go up to 12.5 percent of the monthly salary credit by May this year. Members and employers would have to shell out a total additional amount of P15 to P740 this year.
Premium contributions would go up by 1.5 percent a year until the contribution rate reaches 17 percent from the current 11 percent.
The second tranche of the pension increase, another P1,000, is seen to be distributed by 2022 or earlier, SSS chairman Amado D. Valdez said during the same press conference. Valdez said they could distribute the next increase by 2019 if the reforms being implemented in the fund are successful.
In Cebu City, business leader Philip N. Tan described the adjustment as unfair to active members and employers who would be subsidizing the increase.
Tan, management representative to the Central Visayas Regional Tripartite Wages and Productivity Board and former president of the Mandaue Chamber of Commerce and Industry, pointed out that the amount of a retiree's pension depends on the contribution that he/she made to the fund.
"SSS is a pension fund. It's like an insurance. Your retirement pension is based on your contribution. If you contributed only a small amount, you would also be receiving a small pension. It's not fair to make active members pay for the increase," he said in a phone interview.
Tan said employers have no choice but the comply with the adjustments.
Cebu Chamber of Commerce and Industry (CCCI) president Melanie C. Ng, for her part, noted that the adjustment was done to fulfill a campaign promise by Duterte.
She expressed hope that the decision to grant an increase in the monthly pension was based on a "careful study of the funds available at SSS to support this move."
"There will be a corresponding SSS contribution hike and it's good to note that this will come in tranches so as to lessen the impact on the cost of doing business and on the employees whose contributions will increase as well," she said.
Christian Tuayon, secretary-general of Bagong Alyansang Makabayan-Negros (Bayan-Negros), said they welcome the move.
“The approval is a product of the strong actions made by those who supported and fought for the pension increase,” he said.
But he added the group is opposed to the proposed additional contribution to be paid by SSS members.
Bayan-Negros scored the pronouncements of Duterte’s economic managers that increasing the contributions is necessary to prevent bankcruptcy in the agency.
“The government’s budget is bigger this year thus, it can actually provide subsidy to SSS on top of payments being paid continuously by its members,” Tuayon said.
In Davao, former Chamber president Joji Ilagan-Bian told SunStar Davao that the impact of the adjustments in both the pension and contributions remains to be seen.
"I would like to express optimism that we all can absorb the costs of all of these since preserving the economic life of SSS is equally important as the additional benefits given to pensioners. It will be a challenging balancing act of both the public and private sector,” Bian said.
New chamber president Ronald Go said they welcome any reform for the betterment of retiree benefits.
"We are glad that the financial managers in the government have been able to arrive at a compromise where the retirees receive an increase and the pension fund remains stable," Go said.
Abella said SSS opted to increase the contribution rate to fund the adjustment because Duterte was not amenable to using taxpayers' money to cover the increase.
Duterte's predecessor, former president Benigno S. C. Aquino III, had vetoed a law that increased the monthly SSS pension by P2,000. Aquino said the SSS would go bankrupt if the increase is granted unless premium contributions would be raised, an argument that was also put forward by the country's current economic managers.
Meanwhile, Valdez said SSS will move to reduce contribution delinquency through settlements and prosecution of delinquent employers, among others.
SSS president Emmanuel F. Dooc added that they were looking at expanding the fund's capital base by requiring overseas Filipino workers to register as members prior to deployment abroad. (Marites Villamor-Ilano with reports from Geefe Alba/SunStar Cagayan de Oro, Erwin P. Nicavera/SunStar Bacolod, Jennie P. Arado, Ace Junn Rell S. Perez/SunStar Davao/Sunnex)