Planned Hike in SSS Contributions invalid, illegal Sen Drilon
The planned 1.5-percent increase in the premiums of active Social Security System (SSS) members in May to cover the 1,000-peso hike in monthly pension of SSS retirees is “invalid and illegal,” Senate President Pro Tempore Franklin Drilon said Wednesday.
Citing Republic Act No. 8282 or the Social Security Law, Drilon said the SSS was prohibited from increasing its premium rates to cover additional benefits.
"While the executive's decision to finally grant the long-awaited increase in the pension of SSS retirees is commendable, it should not be used to justify an increase in the premium payment,” Drilon said in a text message.
“The increase in SSS premium to support the increase in pension is invalid and illegal,” Drilon added.
Section 4 (b)(2) of RA 8282 requires the actuary to submit a valuation report on its benefit program every four years to undertake studies and calculations concerning increases in benefits “provided…that such increases in benefits shall not require any increase in the rate of contribution.'
Drilon said the SSS could 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.”
Senator Paolo Benigno “Bam” Aquino IV said the SSS should first consult its members as well as employers before pushing through with the increase in contributions. Aquino said out that the increase would affect more than 30 million Filipinos.
“Aminado naman tayo na maliit lang ang 1.5 percent pero pag sinuma mo iyon, malaking bagay pa rin iyan,” Aquino said.
“Ang kailangang gawin diyan, itaas ang efficiency ng pagkolekta ng kontribusyon, hindi iyong pagtaas ng premium ng mga miyembro,” he added.
Aquino’s cousin, former President Benigno Aquino III, had vetoed a bill proposing an increase in monthly SSS pension by P2,000, saying the move would "compromise" the entire membership of the SSS.
Senator Joel Villanueva said someone had to pay for the additional benefits caused by the executive department.
“We are happy that our retirees will receive the additional pension and hopefully, the SSS management will be able to effectively manage the fund and improve their collection and that the increase in premium will be sufficient to make the fund sustainable,” Villanueva said in a text message.
An increase of 1.5 percent in premiums of active members will hike the contribution rate from 11 percent to 12.5 percent to be shared by employer and employee. The maximum monthly salary credit will also increase from the current P16,000 to P20,000.
According to SSS Chairman Amado Valdez, the contribution rate could be increased annually until it reaches the target of 17 percent in six years.
The increase in contributions came to fore after President Rodrigo Duterte approved a two-tranche P2,000 hike in monthly pension, which will benefit two million retirees.
Presidential spokesperson Ernest Abella said the increase in contributions would ensure the SSS' fund life until 2040.
He said the pension hike would be covered by current contributions and the SSS investment reserve fund.
Senator Richard Gordon, chairman of the Senate Committee on Government Corporations and Public Enterprises, welcomed Duterte’s decision but said there should be a law that would "help the SSS become an even more outstanding manager of the fund.”
“The Senate will provide the appropriate legislation necessary to strengthen the SSS and to assist it in preserving the sustainability and life of its funds that is considered ideal among other social security systems around the world,” Gordon said.
Citing Republic Act No. 8282 or the Social Security Law, Drilon said the SSS was prohibited from increasing its premium rates to cover additional benefits.
"While the executive's decision to finally grant the long-awaited increase in the pension of SSS retirees is commendable, it should not be used to justify an increase in the premium payment,” Drilon said in a text message.
“The increase in SSS premium to support the increase in pension is invalid and illegal,” Drilon added.
Section 4 (b)(2) of RA 8282 requires the actuary to submit a valuation report on its benefit program every four years to undertake studies and calculations concerning increases in benefits “provided…that such increases in benefits shall not require any increase in the rate of contribution.'
Drilon said the SSS could 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.”
Senator Paolo Benigno “Bam” Aquino IV said the SSS should first consult its members as well as employers before pushing through with the increase in contributions. Aquino said out that the increase would affect more than 30 million Filipinos.
“Aminado naman tayo na maliit lang ang 1.5 percent pero pag sinuma mo iyon, malaking bagay pa rin iyan,” Aquino said.
“Ang kailangang gawin diyan, itaas ang efficiency ng pagkolekta ng kontribusyon, hindi iyong pagtaas ng premium ng mga miyembro,” he added.
Aquino’s cousin, former President Benigno Aquino III, had vetoed a bill proposing an increase in monthly SSS pension by P2,000, saying the move would "compromise" the entire membership of the SSS.
Senator Joel Villanueva said someone had to pay for the additional benefits caused by the executive department.
“We are happy that our retirees will receive the additional pension and hopefully, the SSS management will be able to effectively manage the fund and improve their collection and that the increase in premium will be sufficient to make the fund sustainable,” Villanueva said in a text message.
An increase of 1.5 percent in premiums of active members will hike the contribution rate from 11 percent to 12.5 percent to be shared by employer and employee. The maximum monthly salary credit will also increase from the current P16,000 to P20,000.
According to SSS Chairman Amado Valdez, the contribution rate could be increased annually until it reaches the target of 17 percent in six years.
The increase in contributions came to fore after President Rodrigo Duterte approved a two-tranche P2,000 hike in monthly pension, which will benefit two million retirees.
Presidential spokesperson Ernest Abella said the increase in contributions would ensure the SSS' fund life until 2040.
He said the pension hike would be covered by current contributions and the SSS investment reserve fund.
Senator Richard Gordon, chairman of the Senate Committee on Government Corporations and Public Enterprises, welcomed Duterte’s decision but said there should be a law that would "help the SSS become an even more outstanding manager of the fund.”
“The Senate will provide the appropriate legislation necessary to strengthen the SSS and to assist it in preserving the sustainability and life of its funds that is considered ideal among other social security systems around the world,” Gordon said.
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