The Philippine Star

The recommendation of the current SSS president and former Insurance Commissioner Emmanuel Dooc and SSS chairman Amado Valdez was not surprising given the continued use of the 34-million-members-strong Social Security System as a political tool.

Since our President is a man of honor, SSS pensioners will get what was promised during the last elections campaign period when he pledged a P2,000 increase should he win in the presidential race.

In order not to kill the goose that lays the golden egg – well, at least, not immediately – the promised pension increase had been halved, with the first installment of P1,000 to be given this month, and the second half in 2022, which incidentally is the President’s expected last year in office.

Since Dooc is a skilled actuarial, it was expected that the first pension increase tranche would be shored up by an increase – 1.5 percentage points – in contributions of the remaining 14 million paying SSS members.

Employers may be grumbling, but this is much better than having all 34 million members throwing eggs at the President should the SSS collapse during his term.

The next P1,000-increase would be, especially if given in 2022, well, the incoming and next President’s problem. Now that’s what I would call as political masterstroke.

Two pension systems

Let’s give way to some readers who had sent in their views about the SSS. This first comes from Lily Galace. Please read on.

“I am a 70-year old recipient of SSS pension and also receive a pension from the Australian Government. I would like to cite the differences between these two pensions. Both pensions have a similar problem of future payments for incoming pensioners. 

“1. Philippine employees start to avail of the SSS pension at age 60. In Australia, long ago it used to be 60 years old for women and 65 for men. Australia has increased its availability to 67 years old, depending on the age of birth. 

“Based on my age, I qualified at age 64, being born in 1946, the reason being that at the old qualifying age, the pension will have difficulties meeting its future obligations. 

“This is the same problem that the SSS is facing – old age pension is not contributory.

“One reason for the higher age qualification is that the life expectancy in the Philippines is much lower than Australia, which has one of the highest life expectancies in the world.

Different basis

“2. The SSS pension is based on contributions of members, while the [Australian] pension is based on asset and income. If you go beyond the threshold, you do not get anything. 

“There is a bit of derogatory connotation in Australia to be called a pensioner. The alternative is called a self-funded retiree, which is self-explanatory: they fund their own retirement through a scheme called superannuation, which started in the early 1980s. 

“This superannuation scheme is somewhat similar to the SSS Philippines pension in that there is a mandatory contribution for the employee and employer. The more you contribute, the higher your retirement benefits would be. Income from superannuation is tax-free.

“While the idea of giving the increased pension only to the needy might be appropriate, it is difficult to find a cut-off. The administration of cutting off the increased pension to a certain income/assets group is difficult to police. In Australia, to qualify for the age-old pension, you report your assets and income to Centrelink (the government agency in charge of the pension). 

“While this is done on a voluntary basis, you present documents as evidence. It is tempting to report or underreport both assets and income, but the government has authority to get information from banks and other financial institutions to verify your statement if they have reason to believe that the assets and income are underreported.

“If the SSS were to provide adequate pension in old age to private sector employees, then members should be prepared to increase their contributions, both employee and employer.

“It is very difficult to save money while working. The temptations of a nice home, car, and expensive education are much too great to think of. Fortunately, we can rely on our children to provide for their parents in old age. 

Independent elderly

“However, if the government wishes to have a more independent elderly, then the SSS should be free to increase contributions. It should not be politicians who determine it. The SSS is not a bottomless pit. Politicians have no idea what it is to be poor and in need.

“It is best that SSS invest conservatively. However, excellent fund managers can invest more aggressively than ultra conservative investments to earn more for its members.

“Lastly, the SSS management should provide a good example to its members and show their sympathy to the plight of its suffering pensioners. To get million-peso bonuses (so I heard) and have lavish benefits not available to companies with less money to spend is obscene. 

“SSS Board members who ride in fancy cars and flaunt their high positions, and then deny a couple of thousand pesos to its members reduce the Board and management's credibility.

Lost record

“While I am on the subject of SSS, I wish SSS could become more efficient in its administration. It likes to congratulate itself for a job well done to justify its fat bonuses and salaries. Pity the poor contributing members who find that when they apply for SSS pension, SSS can't find their records. 

“I have an uncle who had been writing SSS. In their last communication more than a year ago, SSS said they were manually checking into his records; they are still checking. My relative is now 66 years old. He should have been receiving his pension during the last six years. 

“To the bosses at SSS, he is still waiting. How long does it take to manually check someone's pension? Ako, galit na, I am not used to inefficient government. My uncle is more patient.”

Current realities

This next short letter comes from Federico Infante Lojo of Lipa City. Here’s part of what he wrote: “I am a little bit perplexed on why SSS should employ one chairman and another president. Is it not another way of rewarding the undeserved. Pardon me for my ignorance but I believe managing a pension fund does not require a rocket scientist.

“May I also add that the clamor for pension increase cannot be only based on what the letter of the law dictates and its technicalities but on current realities. I hope the decision makers can take time to check on these realities.”

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