Determined to increase contributions

For the Social Security System, August used to be the favorite month for finalizing the plans to enhance programs and benefits that it would announce on September 1 during its anniversary celebration.

Pensioners have become accustomed to this tradition that they would second-guess pension announcements and ask:

By how much would SSS increase its pensions this time?

Sadly, this tradition was discontinued by President Gloria Macapagal-Arroyo beginning in 2001 and has been completely forgotten by President Benigno S. Aquino III until today in 2015.

They have made us wonder why. Perhaps, they have not even thought that adjusting pensions in keeping with inflation has already become a worldwide practice since the proclamation of the Universal Declaration of Human Rights on December 10, 1948.

They must have gotten fixated with the short actuarial life of the SSS, and blamed repeatedly their predecessors for granting pension increases almost annually without the counterpart contribution increases. They were not told, perhaps, that investments in those years yielded high percentages of returns in the 20s and 30s.

Both feared that SSS reserves would be depleted in the next 38 years and that by giving pension increases, this depletion would even accelerate. Thus, they gave almost nothing.

PGMA granted two pension increases of ten percent each during her ten-year administration but only because SSS celebrated its golden 50th founding anniversary in 2007. As if agreeing, PNoy granted once a 5-percent pension increase in the past five years.

Consistently, PGMA shored up SSS funds. Immediately after assuming office, she increased, on January 1, 2002 the covered salary or maximum amount that was subject to contributions from P12,000 to P15,000. She then increased its rate of contribution by 1 percent of salary credit in 2003 and another 1 percent in 2007. In both, employers shouldered the entire additional contributions without the employee sharing any.

PNoy, on the other hand, increased the contribution rate only once at 0.6 percent of salary credit and even made the employer and his employees share this equally at 0.3 percent each. He made this effective on January 1, 2014 together with the increase in covered salary from P15,000 to P16,000.

He probably didn’t plan to increase pensions but his appointed SSS officials awarded themselves fat bonuses for a performance that we pensioners neither felt nor appreciated.  Expectedly, they were immediately bombarded with public protests and criticism and a consenting PNoy - to assuage the irate public - had no choice but to grant a token 5-percent pension increase effective June 1, 2014.

As of now, we no longer expect anything significant to happen to the SSS pension program during the remainder of his term. It will only continue to deteriorate into uselessness and irrelevance.

SSS may still trumpet re-posting millions of contribution records that it had lost; introduce new and creative educational, calamity and salary loan programs; establish small offices in remote areas; and register kasambahays, market vendors and tricycle drivers here and there.

It could sweeten up its peripheral programs like the funeral benefit which it had recently increased from P20,000 to P40,000. Unfortunately, the amount now depends on the number and amount of contributions of the deceased and maybe, this new formula would encourage more payments before they die.

But it would also mess up the simplicity in determining the amount of funeral benefit of those who die before their contributions were fully accounted for and posted. Funeral benefits would then be processed much longer.

PNoy’s “Daang Matuwid” administration is a bitter lesson from which we can learn how six years of precious time could be squandered by doing nothing.

This August, we should then start contemplating on how to improve the national pension system that is being administered by SSS.

But first we must agree that an average retirement pension of P3,540 - which is way below $100 - is simply unacceptable after we have contributed patiently for 30 or 40 years. If it is all that awaits us at retirement, we now must declare that national pension system as a big, big failure.

We have to drastically alter it, and restore it to its original objective of providing adequate pensions.

We must redesign the SSS pension system so that all pensioners would receive at least P5,000 and as much as P50,000 in the next six years, and up to P100,000 in the next 10 years.

Are these impossible dreams? Not quite, if we consider that these amounts are now currently being enjoyed by all pensioners of the Government Service Insurance System, the military and police, the judiciary and the Constitutional bodies. Moreover, these amounts are just about $100 and $1,000.

We must agree to pay the necessary contributions to establish this kind of national pension system for all. Subsidize through general appropriations the unfunded liabilities of pensioners who no longer contribute, if we have to, but we must require the employed and their employers to contribute more.

This is the only way.

Determined to enforce this out because he cares for us is the president that we must have for the next six years.

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