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Uncaring

We are indeed hopeless fools if by this time we still consider that PNoy and his appointed public officials are true responsible leaders who tread the straight path by not increasing our pensions because that would deplete our pension funds.

The truth is they simply do not care about our social security welfare.

Moreover, it was President Gloria Macapagal Arroyo and her social security officials who originated that myth - that the Social Security System has trillions of unfunded liabilities that it has to raise first before its pensions could be adjusted.

In addition, they developed the silly idea that its actuarial life could be made to grow to 70 years by simply freezing pensions even while retaining the same low contribution rate. They made us believe this in the almost 10 years that they were in office. However, to spice up the 50th founding anniversary of SSS on September 1, 2007, they allowed a token 10-percent pension increase.

Inexplicably, PNoy and his appointed officials embraced this idea and did nothing to adjust pensions. They granted a 5-percent adjustment in 2014, but this was done to assuage an outraged public after SSS officials granted themselves fat bonuses. Otherwise, PNoy did nothing, not add even a few pesos to the minimum pension of P1,200 that President Fidel Ramos and SSS Administrator Rene Valencia set 22 years ago on September 1, 1993.

In fact, the next 70 years would always be full of uncertainties and surprises. But by setting our level of optimism and pessimism – and after quantifying our assumed future employment rates, wages, inflation, investment returns and longevity – we would know when contribution rates must be raised to make pension funds last that long.

What is important is that we resolve as a united people to provide adequate pensions to enable pensioners and their families to live above the poverty line. The workers and employers among us would then fund these pensions by remitting the appropriate contributions via the payroll system.

But PNoy does not care, clueless that SSS is only giving its one million retirement pensioners an average P3,540 or US$80 as pensions.

SSS pensions must be increased, but it is also foolhardy to abruptly increase them. The total assets of SSS as of March 31, 2015 stood at P444 billion and they are worth only 4 times its 2014 annual benefit disbursements of P102 billion. The P120 billion contributions that SSS collected and 8.3-percent investment return it earned could hardly pay for these benefits and its operating expenses.

Obviously, doubling the pensions would wipe out these assets within four to five years.

But pensions, nonetheless, must be increased over time at a pace that could be supported by scheduled increases in contributions.

Consider the bold reforms that PGMA and Government Service Insurance System President and General Manager Winston Garcia initiated for GSIS. They are lessons that we all must learn and adopt.

The pensions of GSIS before were so meager – as they were based only on a maximum salary cap of P16,000 – that most members were withdrawing their contributions and consequentially forfeiting their pension rights.

Incredibly, GSIS had been collecting from government employers contributions that were based on actual salary but was paying pensions based only on P12,000.

But by January 1, 2003, GSIS started to collect contributions from government employees based on their actual salary. It also increased the total contribution rate to 21 percent, with employee’s contribution increased from 6 to 9 percent and employer share retained at 12 percent.

Thereafter, GSIS began computing pensions based on actual salary, and increased its minimum pension to P5,000 in 2013.

In contrast, SSS members contribute until now only 3.633 percent and their employers, 7.367 percent for a total of only 11 percent on a maximum salary credit of P16,000. The self-employed professionals, kasambahays, tricycle drivers and farmers shoulder the entire 11 percent contribution.

Isn’t this a case of an uneven and unfair playing field for our private and public workers?

Unfortunately, PNoy and his officials – and even us - don’t care.

If they do not lead us by sticking out their necks to require private sector employers to pay the equivalent social security contributions that their government counterparts pay for state workers.

The private-sector employers oppose any small increase in contributions and voice this out through their professional spokespersons in various employer associations.

Their opposition is consistently so strong that they oppose even the smallest pension increase in anticipation that it would lead to a contribution adjustment later.

But there remains a glimmer of hope for pension-increase hopefuls. Months prior to next year’s presidential election, PNoy may still increase pensions - not because he cares for us elderly pensioners - but because he has to woo us for the coming presidential election. He might think that this way, he would sway us into voting for his anointed presidential candidate.

Otherwise, we would remember him as that uncaring president who doled out a mere 5 percent pension increase throughout his entire six years in Malacanang - not even good enough to average one percent per year.

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