CONTRIBUTING members of the Social Security System, private sector employees, should keep their fingers crossed that Malacañang got its numbers correctly after President Duterte approved a P1,000 monthly increase for pensioners.
The pension hike is just half of the proposed amount but projections last year said SSS will still get hit a whopping P28 billion a year and double that when the second half of the increase is paid out in 2022 or as early as 2019.
Duterte having turned down the option of making taxpayers subsidize part of the pension increase, the entirety of the burden must now be borne by the 33 million active members and private sector employers.
Based on the government’s count, jacking up contributions from the current 11 percent to 12.5 percent should sufficiently cover the P1,000 additional pension.
That means however that the contributions of majority of the active members must be remitted like clockwork. Only thing is, the ideal scenario is far from the real situation.
By its own count, the SSS management estimates that roughly a third of the total active members – around 12 million - are paying regularly. The rest are delinquent accounts, do not hold regular employment, or voluntary contributors that pay their dues intermittently.
Worst-case scenario, the first tranche of the pension hike will just about wipe out the SSS investment income estimated at around P30 to 40 billion a year which leaves it little elbow room for additional investments to further extend its life.
That makes the increase in members’ contribution a matter of life and death for the SSS.
The additional sum would have to prove enough together with the proposed reforms to the systems like lopping off the perks paid to the state pension fund’s executives and putting the squeeze on companies with outstanding accountabilities.
If the calculations prove way off, Congress would have little choice other than bailing out the SSS.
But by the time that realization comes around, another administration would have inherited the problem. – PT.