The latest data released Monday showed that the state-run Social Security System’s profit plummeted down to 37 percent to P20.3B in 2017 after President Duterte approved a monthly pension hike of P2,000, of which P1,000 per month were already relished by the pensioners.
According to SSS president and chief executive Emmanuel F. Dooc, the SSS fulfilled President Duterte’s promise of higher benefits for the pensioners. The SSS disbursed roughly P33.5 billion to cover additional benefit to pensioner starting January 2017. As a result, SSS expenditures, which were made up largely by benefit payments, increased compared to 2016, wherein no additional benefit was savored by the pensioner. Total benefit payments-including death, disability, maternity, retirement as well as sickness ricochet 28 percent to P170.7 billion last year.
While the SSS’s dividend ascent 15 percent to P200.5 billion, expenditures climbed by a faster 27 percent to P180.2 billion in 2016. It’s P32 billion net income was lower than the P40.7 billion profit posted in 2015.
As a result, the SSS was seeking the approval of the President to its proposal to increase the contribution rate to 14 percent from the current 11 percent to compensate for the impact of the pension increase and to cope up with the P2,000 increase in pension.
However, due to the passage of the Tax Reform for Acceleration and Inclusions (TRAIN) Act, the SSS was unable to implement the 1.5 percentage point increase in contribution rate that was initially scheduled in May 2017.
The pension fund also demands to raise the minimum monthly salary credit to P4,000 from P1,000 at present, as well as the maximum cap to P20,000 from P16,000.
The contribution rate hike will allow the SSS to extend the fund’s life to 2044 from the current 2042. The hike is necessary to avoid the reduction of SSS’s actuarial life by 14-17 years to 2025-2028 if the contribution will not be increased.
In 2016, the operation expenses ascended by 0.4 percent to P9.5 billion.
“Our operating expenses are way below our allowable expense under the Social Security Law of 1991, which is equivalent to not more than 12 percent of the total yearly contributions and 3 percent of other revenues,” Dooc elucidate. According to Dooc, they are pleased that the management and employee’s efforts are paid off because the SSS achieved good numbers in 2017 on the back of their intensified campaign to increase their collections. The pension fund’s investment and other income rocketed 36 percent to P40.8 billion in 2017.
“we’ll strive to make benefits more relevant while ensuring financial viability through the support of all our stakeholders, especially our legislators, who are now studying the proposed Social Security Charter Amendment Act due for bicameral hearing soon.” Dooc annotated.