Drilon: SSS contribution hike ‘illegal’

Citing Republic Act 8282, Senate President Pro-Tempore Franklin Drilon says the SSS cannot recommend an increase in benefits that require a corresponding increase in contribution

by Camille Elemia, Rappler, January 11, 2017

MANILA, Philippines – Senate President Pro-Tempore Franklin Drilon and Senator Paolo Benigno “Bam” Aquino IV questioned the planned increase in the monthly contribution of Social Security Service (SSS) members.

This came after SSS chairman Amado Valdez said that starting May, there would be a corresponding increase of 1.5% in monthly premiums to counter the P1,000 pension hike approved by President Rodrigo Duterte.

There are more than 30 million SSS members while there are at least 2 millions pensioners.

While he lauds the pension increase, Drilon said the new policy to increase members’ premiums is “invalid” and “illegal.”

“While the executive’s decision to finally grant the long-awaited increase in the pension of SSS retirees is commendable, it should not be used to justify an increase in the premium payment,” Drilon said in a statement.

Citing Republic Act No. 8282 or the Social Security Law of 1997, Drilon said the law prohibits SSS to recommend increase in benefits that would require an increase in contribution.

The senator explained that the SSS can only implement an increase in benefits, subject to the approval of the President, “if such increase is based on the actuarial soundness of the reserve fund” and as “such shall not require any increase in the rate contribution.”

“The increase in benefits of our pensioners must not come from a similar increase in the burden shouldered by current SSS contributors. The law is crystal clear in that regard,” Drilon stressed.

Aquino said he, as well as other business groups, was surprised by the change in policy.

“Nagulat rin kami na mayroon palang increase in premiums na ipapataw sa 34 million Filipinos. Dalawang milyon po kasi iyong SSS pensioners natin at sumuporta naman tayo sa pag-increase ng pension nila. Pero I think marami ring nagulat, pati na rin ang business community, iyong mga employer nagulat sa pagtaas ng premium na 1.5%,” Aquino said in an interview on Wednesday, January 11.

(We were also surprised that there is an increase in premiums that would be shouldered by 34 million Filipinos. We have 2 million SSS pensioners and we support their pension increase but many were surprised, including the business community. The employers were shocked that there will be a 1.5% increase in premiums.)

For Aquino, improved efficiency in collecting premium is needed and not a premium hike, saying this is the sentiment of many of his colleagues in the Senate. He added that in the past Congress, there was no talk of an increase in premium just to grant the pension hike.

“I think iyong mga pinag-uusapan noon ay pagtaas ng pensiyon na walang kasabay na pagtaas ng premium, bagkus iyong pagtaas ng efficiency sa koleksiyon (I think what was discussed before was the increase of pension without any corresponding hike in premium; instead an increased efficiency in collection),” Aquno said.

“Palagay ko kasi, ang kailangang gawin diyan, itaas ang efficiency ng pagkolekta ng kontribusyon, hindi iyong pagtaas ng premium ng mga miyembro. Marami po sa mga senador, nagtulak po nito at ang alam ko, ang pinakagusto nila, itaas ang efficiency ng pagkolekta,” he added.

(I think what should be done is to increase the efficiency of collection of SSS contributions, and not to raise the premium of members. Many senators pushed for the pension hike and they want a more efficient collection system.)

Aquino said he wants the SSS to explain if the pension increase would not deflate the funds of the agency in the years to come.

The senator’s cousin, former president Benigno Aquino III, earlier vetoed the law seeking to grant a P2,000-pension increase, saying it would have “dire financial consequences” for the entire SSS membership in the long run due to negative income. – Rappler.com