Senate panel reject proposal to raise SSS premiums

social-security-system

SENATOR Ralph Recto on Tuesday rejected the proposal of Social Security System (SSS) to increase premium collection in order to augment the needed amount on the plan to raise pension to members.

“They said, if we (SSS) increase the pension kailangan itaas ang contribution. Not necessarily, depends on how you invest money. If you invest properly, then you could earn more money to pay for pensions para hindi lang galing sa contributors,” Recto said after the public hearing on the proposal.

Senate Bills 544, 2883 and 2964 aimed to increase pension under the SSS which proposed to raise the minimum monthly pension to P3,000 and annual increase of P500 until the minimum P5,000 a month is reached.

Recto debunked the argument by Rizaldy Capulong, SSS vice president for Capital Market Division, that increasing pension will affect their financial viability.

“I don’t think so. Too early to say naman for them to say that and too early for me to make conclusion. I asked them to submit actuarial studies but looking at their two years financial statement, I don’t think they gonna’ run out of money,” Recto said.

Presently, Recto learned, that SSS have more than P340 billion in reserved funds and they make at least P25 billion additional every year in the least two years.

“So I think it is sufficient and that’s why we’re studying the possibility of increasing pensions for senior citizens,” the lawmaker argued.

Recto also believed that increasing pension will have a multiplier effect on the economy by creating new employments and make more new members.

“That is also helpful for economy. When you increase pension for senior citizens, they will have more to spent, and in effect it will create employment, multiplier effect and eventually you will have more members also in the SSS,” Recto explained.

“It’s a function of demographic profile as well including how many people are coming to the workforce,” he added.

Currently, SSS has 1.6 million pensioners and roughly 10 million contributing members. “So 1 is to 6. Six people like you and me contributing to the pension of our elders.”

“SSS was created as institution, these are payroll taxes, and it doesn’t go to the general fund. In other countries it goes to the general fund and then Congress appropriates. In this case, no. What we did in 1957, we created an institution. That’s money invested to help pay for senior citizens at the appropriate time. So, what you put in, you get back in return. That’s the idea,” Recto concluded.

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