SSS premium hike to hurt workers

by Gabrielle H. Binaday, Manila Standard, Jan. 23, 2017

An industry group on Monday warned the increase in members’ contribution rate may hurt some companies and trigger layoffs.

“An increase in employer contributions will increase overhead costs raising the pressure to restructure the organization and that this may eventually bring about possible layoffs or workforce reduction,” People Management Association of the Philippines president Ramon Segismundo said in a news briefing in Ortigas Center.

PMAP, a national organization of human resources management practitioners, said while the recently approved P2,000 across-the-board SSS pension hike was pro-poor and pro-business, some of its implications could also harm the workforce.

“An increase in employee contributions may not be beneficial for workers as this will result in a smaller take home pay,” Segismundo said.

“This will then prompt workers to demand a wage increase, but taxes and additional contributions will take up a bigger portion of any wage increase,” he said.

SSS member contribution rate is currently at 11 percent of the monthly salary credit not exceeding P16,000 and this is being shared by the employer (7.37 percent) and the employee (3.63 percent).

The SSS, in a bid to compensate losses from the pension increase, is set to increase member contributions by 1.5 percentage points every year in four years to reach 17 percent by 2020.

PMAP said to address the need to improve social security benefits, there was a need for a three-pronged action plan such as the increase in profitability in the investments of the funds, increase collection efficiency in contributions and credit loan payments and reduce the administrative fixed costs.

“There is no substitute for a high level of governance for any fund more so social security funds. We have to benchmark SSS with GSIS and social security funds in other emerging and advanced economies. That way, lessons can be learned to determine ways on how to improve the management of the fund,” Segismundo said.

Meanwhile, an owner of a publishing company is now in jail for non-payment and non-remittance of employees’ social security and employees’ compensation contributions to SSS after the agency started an intensified campaign with the Philippine National Policeto run after delinquent employers for violation of the Social Security Act of 1997.

“Together with the PNP, we served warrants of arrest last week against two erring employers due to a final and executory judgement and findings of probable cause. This is to warn all employers that no one is above the law and SSS will no longer tolerate blatant disregard for social security protection of its member-workers,” said Social Security Commission chairman Amado Valdez.

The Makati regional trial court convicted Victor Caluag, his 83-year old mother Conchita and Ma. Antonietta Henson, board of directors of Silver Stream Publishing Corp., for non-remittance of contributions.

Henson remains at large and the case against accused RealizaHenson was sent to the archives since she was not arraigned.

Based on the decision, the three accused jumped bail and failed to attend hearings despite due notice hence bench warrants were issued against them.

The Caluags were arrested at their residence in Bel-Air Village, Makati City on Jan. 19. They will both serve a minimum of six years and 1 day to 8 years imprisonment, and were ordered to pay SSS the amount of P1,608,837.45 million for unpaid contributions and penalties as of Dec. 15, 2011.