SSS grants 10 percent increase in monthly pensions

The Social Security System (SSS) announced yesterday a 10-percent increase in the monthly pension of more than one million members.

The increase will take effect Sept. 1, according to Social Security Commission Chairman Thelmo Cunanan who announced the good news during the 32nd Philippine Business Conference yesterday.

Cunanan told reporters that the SSS could now afford to grant an across-the-board increase in pensioner benefits because of the agency’s better financial condition.

"The investments of pension funds are much better, we would like to share this with our pensioner members. We hope this can make a difference with the higher inflation rate," he said.

He disclosed that the SSS collection reached some P1.6 billion in recent months, and under Mrs. Arroyo’s leadership, the actuarial or fund life of SSS rose from a mere five years to 27 years.

"The SSS was almost bankrupt before the President assumed office. I would no longer say why. We are hoping to have an actuarial life of 60 years, that’s almost in perpetuity. We are happy that our fund management is guided by good economic policies and supported by the President," he added.

The last pension increase the SSS granted was in 2000, which was also a 10 percent across-the-board increase in pensions. The SSS has since placed a moratorium in granting pension increases until such time that there is a source of funding for it.

Currently, the SSS monthly pension ranges from P1,000 to almost P15,000, with an average pension of P2,553 per month.

As of June of this year, there were 26.4 million individuals registered with the SSS. Of these, 20.9 million are private sector employees (including household helpers), 5.5 million are self-employed workers and voluntary members, including the 533,859 registered OFW-members. There were also 774,040 registered employers.

The number of SSS members who have become pensioners due to retirement, disability and death reached more than 1.1 million as of June 2006.

Because of the economic condition in the country, the SSS said it could not implement an increase in the contribution rate as it would only be an additional burden on workers and employers. Thus, from 1990 to 2002, SSS benefit payments exceeded contribution collections in 10 of these 13 years.

The SSS said investment income was used to make up for the deficits. From 1980 to 2000, across-the-board pension increases of 10 to 20 percent were declared 19 times, the last of which was in September 2000.

These pension increases were given even without implementing an increase in the SSS contribution rate, which was fixed at 8.4 percent since 1979 and was raised only in March 2003 by one percentage point to 9.4 percent but was shouldered by the employers.

Taking all of these into consideration, plus other factors such as the boom-bust cycle of the economy and investment climate, and the increasing longevity of pensioners due to improved lifestyles and medical advancements, the SSS said its projected life seemed to have quickly dissipated.

Since the 1999 actuarial valuation, the SSS said various corrective measures were implemented such as the increase in the contribution rate, the increase in the maximum salary base for contributions from P12,000 to P15,000, and the redefinition of Credited Years of Service to restore the SSS fund back to health.