The Trade Union Congress of the Philippines (TUCP) today rejected proposals of the Department of Finance to hike member s contributions to the Social Security System (SSS) saying it is ill-timed.
According to news reports, DOF Secretary Juanita Amatong was quoted as saying that increasing contributions in the SSS would be one of the priorities of the department in its effort to plug the financial problems of the pension fund.
The SSS and the DOF have been pushing to increase contributions in the last two years to cover the funds growing expenditures predominantly on pension benefits. The SSS claims that payments benefits of members granted in the last few years exceed the amount of contributions the fund had been collecting.
The SSS also disclosed that it would be forced to use it reserves by year 2008 if it does not increase contributions.
While we acknowledge that the SSS has its share of problems, we do not believe that the working people of this country can afford additional deductions in their paychecks at this time especially when costs of living are all going up , TUCP said.
The TUCP instead urged the SSS, the country s private workers pension fund, to consider adopting a system whereby SSS members with bigger incomes are given the choice to increase their contributions on a voluntary basis.
Under the TUCP proposal, a member may opt to contribute higher premiums. The increase in his or her contributions will entitle the member to a better range of benefits.
Say a member may adjust his or her contribution by at least 2% on top of the current 9.4%. The increase will give the member a higher pension, or a higher entitlement for salary or calamity loans , TUCP said.
Even if only 500,000 SSS members choose the optional additional premium contribution scheme of 2% of their income that would translate to P200 million additional premium contributions per month or P2.4 billion a year.
The idea here is to let members with bigger disposable incomes to increase their pension and other entitlements by contributing more at the same time unburdening workers who can barely make both ends meet from additional deductions , TUCP said.
The labor group said that the proposed scheme would function as a system of allowing those who earn more to help those who earn less.
We believe our proposal will generate a substantial amount of additional funds to SSS and give a much needed shot in the arm. This will also give lower-subsidized workers breathing room in this period when take-home pay are not able to keep up with increases in prices of commodities and services , TUCP said.
The SSS has some 24.3 million members. Membership in the fund entitles one to a range of benefits such as salary, calamity, and housing loans aside from old-age pension.
A study commissioned by the SSS in 2000 showed that the average pension a retired worker gets from SSS is P2,962.00. The amount can only cover the average nutritional needs of a retiree.
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