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National

Drilon: SSS premium hike is illegal

SSS retiree beneficiary. File photograph by Ana Relova, InterAksyon.

InterAksyon.com
The online news portal of TV5

MANILA - Even as he lauded President Duterte for allowing the increase in base Social Security pensions, Senate President pro tempore Franklin Drilon on Wednesday warned that the Social Security System (SSS) is violating its own charter by increasing premium contributions.

"Such action is contrary to law. SSS is not allowed to raise the premium rates for the purpose of making up for increased benefits," Drilon said.

In a statement, Drilon said that the decision of the Executive to finally grant the long-awaited increase in the pension of SSS retirees was commendable, but added that such a move should not be used to justify an increase in the social security premium rates.

Citing Section 4 of Republic Act No. 8282, Drilon said that the law prohibits SSS to recommend an increase in benefits that would require an increase in contribution.

"The increase in benefits of our pensioners must not come from a similar increase in the burden shouldered by current SSS contributors. The law is crystal clear in that regard," Drilon stressed.

Section 4 (2) states that SSS shall have the powers and duties "to provide for feasible increases in benefits every four years, including the addition of new ones, under such rules and regulations as the Commission may adopt, subject to the approval of the President of the Philippines: Provided, That the actuarial soundness of the reserve fund shall be guaranteed: Provided, further, that such increases in benefits shall not require any increase in the rate of contribution."

The senator, a lawyer and former justice secretary, explained that the SSS can only implement an increase in the benefits of its members, subject to the approval of the President, "if such increase is based on the actuarial soundness of the reserve fund" and as "such shall not require any increase in the rate contribution."

Drilon said that, although the adjustment in the rate of contribution will take effect by May 2017, it is clear that such action is carried out in order to fund the pension increase.

"The President's move to help our aging SSS pensioners is laudable, but the executive branch must also ensure that this pension hike will not be used as an excuse to enforce higher contributions from SSS members," Drilon concluded.

In a press statement issued by SSS, its chairman Dean Amado Valdez was quoted as having said that, "At the same time, his decision to implement the pension increase with a corresponding contribution hike, plus increasing the MSC threshold, helps drive continuing reforms in SSS to consider the welfare of the greater population of over 30 million members, who look forward to their own SSS pensions at the time of their retirement."

Meanwhile, Senator Bam Aquino supported Drilon's position, saying that, instead of increasing the premium payments, SSS should improve collections and fund's asset pool.

"Palagay ko kasi, ang kailangang gawin diyan, itaas ang efficiency ng pagkolekta ng kontribusyon, hindi iyong pagtaas ng premium ng mga miyembro (I think what should have been done was jack up the collection efficiency, not the members' premium contribution)," Aquino said.

Senator Juan Edgardo "Sonny" Angara, on the other hand, pointed out that, without the premium increase: "Mauubos ang pondo at kawawa ang mga bata ngayon pag-retire nila wala ng reserves ang pension. Sayang lang ang ni-remit nila kapag di ginawa (The fund will run out at a faster pace, and the young workers would not be able to benefit from the proceeds of their remitted premiums)."

For his part, Senator Francis "Chiz" Escudero urged SSS to explain and justify the increase in premium payments backed up by actuarial studies.

"They should also prove that their previous investments and collection efficiency (which is very low) have improved but that these were insufficient to support the additional benefit," Escudero said.

Senator Richard Gordon said: "It is our duty in the Senate to provide laws that would improve our people's lives, though I don't encourage the Senate to legislate pension increases. However, we have to provide appropriate legislation to help the SSS become an even more outstanding manager of the fund, so that it could expand its membership, invest and maximize the use of its assets, and manage the funds in projects that would ensure a healthy return on investments."

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