THE Social Security System can absorb the impact of a measure seeking to defer the scheduled increase in the monthly contribution of its members, its president and CEO Aurora Ignacio told lawmakers yesterday.
Ignacio told the House committee on public accounts that while the SSS will be in a difficult situation, the state-owned pension fund has a reserve fund of about P540 billion and collects an annual average of P240 billion from its members, an amount which is enough for it to stay afloat.
“Kapag hindi po in-increase ang rate ngayon, hindi naman ho kami babagsak (If we don’t increase (the monthly contributions) now, we won’t be in the red,” Ignacio said when asked by 1-PACMAN party-list Rep. Eric Pineda if the suspension of scheduled the contribution hike would cause it to collapse.
The House of Representatives last week approved on third and final reading the twin bills filed by Speaker Lord Allan Jay Velasco seeking to grant President Duterte the power to suspend the scheduled increases in member contributions to SSS and the Philippine Health Insurance Corp. (PhilHealth) and SSS “in times of national emergencies” such as the COVID-19 pandemic.
Two Senate committees approved a similar proposal last month.
The SSS has expressed opposition to the proposed deferment, saying it would considerably strain the already dire financial position of the pension fund with Ignacio pegging the loss to as much as P41.37 billion this year which “will further exacerbate our already dire financial position.”
She said the SSS’ own studies show that aside from the projected loss in contributions, the state insurer will also suffer a projected deficit of P14.9. billion this year 2021 on top of increasing unfunded liabilities “that are already running in trillions of pesos.”
Bayan Muna Rep. Carlos Isagani Zarate recalled SSS’ commitment in the 17th Congress that increasing the members’ contributions will be last in its list of plans.
SSS admitted it continues to struggle with collecting premiums, as its current collection delinquency now amounts to P10 billion. The agency also said that it is spending close to P9 billion in operating expenses.
Pineda advised SSS to do some “house-cleaning” before considering imposing rate hikes among members, saying the agency might be “bloated.”
SSS has been criticized for its bloated bureaucracy after many of its officials were reportedly getting paid high salaries and bonuses.
The committee ordered the SSS leadership to provide it with the current number of top officials as well as its operating expenses. It also directed SSS to submit detailed reports on its investment portfolio, as well as the total number and status of delinquent cases pending before its legal department.