Bizmen: Plan to increase SSS premiums untimely

CEBU, Philippines -  While some business leaders in Cebu expressed approval of the proposal to increase members’ contribution to the Social Security System (SSS), others are calling for further study saying the proposal is untimely considering the fragility of the economy.

“Yes, I agree to the proposed increase of SSS contribution, provided that there is corresponding upgrade of benefits,” said Cebu Business Club (CBC) president Gordon Alan “Dondi” Joseph.

Joseph said the government needs to increase its ability to save and to deliver better services to its people including members of the SSS.

“Government, employees, and employers need to contribute to certainty,” Joseph said.

 Recently, SSS, the pension fund for workers in the private sector, announced that it seeks Malacañang’s approval of its proposal to increase the contribution of members by 0.6 percent within the first half of the year.

Cebu Chamber of Commerce and Industry (CCCI) president Samuel Chioson said that this move is good, in order to sustain SSS membership’s funding at this time considering cost increases and SSS does not have enough fund for the next 15 years.

Export leader Ramir Bonghanoy on the other hand, said that increasing the contribution cost for SSS is untimely.

Bonghanoy, the president of Gifts, Toys, and Housewares, Foundation Inc. (Cebu-GTH) said that cost of doing business in the Philippines has already gone up substantially, because of several reasons such as power rates, environmental and other government and trade regulations.

“Any additional burden would certainly force businesses to choose a better option—close shop,” said Bonghanoy.

In an earlier report, SSS President and Chief Executive Officer Emilio de Quiros Jr. said the pension fund wants to increase the contribution from 10.4 percent to 11 percent, or 0.6 percent higher of the employee’s monthly salary. He did not provide details of the actual amount the increase would contribute, and the current base figure.

“Raising the contribution rate to 11 percent of the monthly salary will be equally shared by employers and workers,” de Quiros said

“There are no more obstacles like a wage hike, and we are now closely coordinating with the employers and workers’ groups to finalize [the increase],” added de Quiros.

Businessman Jay P. Aldeguer said that while this is a good move, the government should study this proposal carefully, “I think it is both a burden for both employers and employees at this point. This would just be another short-term remedy.”

Aldeguer, the president and chief executive officer (CEO) of Islands Group of Companies, said that the issue of volatile economy should be addressed through a more comprehensive and more sustainable measures.

The proposed increase would also extend the benefits and pension to its members from 2039 to 2049.

Under the 2007 actuarial valuation, the pension fund’s life is seen to last until 2039, or by 27 years.

The contribution rate of SSS’ 10.4 percent, which is being deducted from the employee’s salary, is less than half of the 21-percent rate of the Government Service Insurance System, the pension fund for state workers.

The average contribution rate among Asian countries is 23 percent and among European countries is at 35 percent.

The last increase in the contribution rate by SSS was made in 2007 with a 1-percent adjustment. (FREEMAN)