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Friday, September 27, 2002
Employers refuse to act as SSS loan co-makers
By Jessica B. Natad
EMPLOYERS should not be forced to pay for the unpaid loans of their employees.
This is the stand of the Personnel Management Association of the Philippines (Pmap) on a controversial circular from the Social Security System, which requires the employer to sign as co-maker of a loan applied for by an employee with the state-run pension fund.
“Pmap has to disagree because the circular is very disadvantageous to the employers,” Pmap national president Ernesto Espinosa said during a press conference for the organization’s 39th four-day national conference that kicked off Wednesday at the Waterfront Cebu City Hotel.
A co-maker is a person who commits to pay for the loan taken out by an applicant in case the latter fails to pay his obligations. The co-maker is legally obliged to assume the obligation.
Espinosa said the SSS had temporarily shelved this plan due to many objections.
Hike
As regards the fund’s proposed premium increase, he said Pmap would only support the move if all other means such as running after delinquent companies, cutting their operational costs, and identifying good investments, had already been explored.
SSS has proposed a premium hike to 16 percent of the monthly salary credit from every employee to be implemented on installment basis within five years to solve its liquidity problem that has threatened the existence of the fund. The state-run pension fund has been collecting 8.4 percent of the monthly salary credit from each member since 1979.
The Cebu business community has opposed the proposal, saying an increase would increase the burden on both the employer and employee who are both struggling to survive the economic crisis.
The law requires companies to pay for 60 percent of the calculated contribution of each member. The remaining 40 percent would be paid by the member.
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