Just before we could approach the Christmas 2015 season of hope and the 2016 presidential election, two have been added to our list of hopeless things.
The first was the presidential candidacy of Mayor Digong Duterte, who has decided with finality that he wouldn’t seek the presidency anymore. By not filing his Certificate of Candidacy before the deadline, he has made it very clear to all that nothing could change his decision anymore.
The second was the passage of the House-approved bill that proposes to increase by P2,000 our monthly pensions from the Social Security System. No less than the Senate’s incumbent and former Presidents Frank Drilon and Juan Ponce Enrile played the contravida role against its passage.
Among their junior Senate colleagues, who would question their combined wisdom that the proposal would bankrupt SSS by year 2029?
Certainly, they are the oldest—and yes, wisest—of our current senators who could best understand the plight of elderly citizens like us.
Only Senator Miriam Defensor-Santiago—Senator Drilon’s former classmate at the University of the Philippines and Senator Enrile’s “bitter and obsessive hater”—would have the guts to stand up and challenge them to a debate.
She has done this before and could very well do it again after she has filed her certificate of candidacy for the presidency. She could be the Senate pension champion if she wants to, and win our votes of at least two million pensioners, not counting those of our dependents.
Senator Enrile seemed finished with making voters happy. For the sake of the 30-million active SSS members who would be affected adversely with its bankruptcy, he had decided that killing the bill is more patriotic.
But for Senator Drilon, the thought has somehow dawned on him that opposing the bill won’t get him reelected next year.
Thus, he has backpedaled and declared that the bill is still alive while in its period of interpellation. Its deliberations and possible passage have only been deferred until the Senate resumption of session on Nov. 3.
Must Congress pass a law to increase SSS pensions?
No. SSS has increased its pensions 21 times since 1980 without bothering Congress. All it did was have them adopted by the Social Security Commission and approved by previous presidents.
Don’t our legislators know that SSS has been authorized to increase its pensions since the time of President Ferdinand Marcos?
That authority was what PNoy also used in his one and only pension increase of 5 percent last January 2014.
But why is SSS no longer increasing its pensions as if it has cast in stone its goal of prolonging its actuarial life to 75 years.
SSS should share with us the Catch 22 provisions in the grant of its pensions—“That the actuarial soundness of the reserve fund shall be guaranteed” and that “such increases in benefits shall not require any increase in the rate of contribution.”
With these restrictions, how did previous SSS administrators increase pensions?
They simply skirted these Catch 22 provisions. Otherwise, they wouldn’t be able to do anything. The Social Security Law did not define “actuarial soundness” anyway, and even actuaries couldn’t agree on what constitute it.
Moreover, pension increases cannot be responsible for all contribution rate increases. A dozen other factors could necessitate these contribution increases such as adverse demographic, economic, labor and social changes.
Perhaps, Presidents Ferdinand Marcos, Cory Aquino, Fidel Ramos, Joseph Estrada and Gloria Macapagal-Arroyo ordered those pension increases.
In the final analysis, “if there’s a will, there’s a way.”
The present SSS officials obviously fear violating these Catch 22 provisions and constantly cite them as their convenient alibi for freezing pensions while expanding non-core activities such as extending subsidized member loans and increasing funeral benefits.
Congress should ask what actions would enable pension increases.
The answer has been circulating around the world in the past two decades since World Bank’s Estelle James published in 1994 her book “Averting the Old Age Crisis”—reform the contribution system. The pension benefit system will improve accordingly.
Equalize the workers’ contributions of 3.63 percent with that of the employers’ share of 7.37 percent of salary credit. This would raise the total contribution rate to 14.74 percent and add at least P40.63 billion in annual contributions. This is enough to finance the P2,000 pension increase.
This has been the contribution sharing system of the PhilHealth program since 1969.
Apply the contribution rate to the total salary. With this reform, future pensions would replace proportionately the last salary. Without it, one who retires with a salary of P50,000 will continue to receive a pension based on P16,000 only.
This contribution rate application has been implemented by the Government Service Insurance System since the time of PGMA and her GSIS president and general manager Winston Garcia.
Look how happy and contented now GSIS pensioners are!
By reversing themselves, Senators Drilon and Ponce Enrile could still rebound but only if they would impose the above reforms.
We then could still receive the additional P2,000 in the season of hope without feeling guilty that it would bankrupt SSS someday.
