SSS: Collection efficiency not enough to fund proposed pension hike

MANILA, Philippines - Five current members of Social Security System (SSS) are paying for a single pensioner every month, making an increase in collection efficiency insufficient to fund a vetoed P2,000 across-the-board pension hike. 

“Collection efficiency is not the solution,” said Michael Viktor Alimurong, representative of the general public to the SSS commission, on Monday.

According to SSS data, the 33 million members pay an average of P1,100 per month as against the P3,200 average pension of 2.15 million retirees and their dependents.

The former pays an average of nine months per year, while the latter receives payouts for 12 months plus a one month bonus.

Of the 33 million however, only 12 million are “actively paying” members, translating to collection rate of 38 percent. Alimurong said it would be hard to collect from those delinquent payers since most of them are from the informal sector.

“This is not the answer. Why? Because 75 percent of our members are from the informal sector. Those people who have no capacity to sustain payments every month,” Alimurong said in a briefing.

“People are saying SSS is anti-poor. But wouldn’t it be more anti-poor if we force these people to pay? Remember, you are an SSS member even if you just pay for one month of contribution,” he explained.

Last week, President Aquino returned House Bill 5842 to the legislature unapproved, explaining the proposed hike would result into the SSS fund to get usurped by 2029, much lower than the present actuarial life of until 2042.

SSS President Emilio de Quiros Jr. said the ideal fund life should be 70 years, which is “still a long way to go” even at current levels.

While revenues and assets have also risen under Aquino, de Quiros pointed out such gains could easily be reversed if the pension hike was approved without a commensurate increase in contributions.

Average revenues more than tripled to P33 billion from 2010 to 2004, while assets surged by half to P447 billion as of October last year, SSS data showed.

“What we are just saying is that now, the SSS performance is good which we hope the next administration will continue. We are not saying we cannot do it ever. Maybe at some point in time, we can do it,” de Quiros said.