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Bayan Muna: SSS using old scare tactics to avoid pension hike

Social Security System (SSS) president Emmanuel Dooc is using old scare tactics for the fund to defer payment of pension increases, Bayan Muna Rep. Carlos Isagani Zarate and Bayan Muna chairman and former Rep. Neri Colmenares said.

Reacting to a statement by Dooc that the SSS may suffer bankruptcy if it is forced to pay additional P2.5 billion a month to pensioners starting 2019, the Bayan Muna leaders said the government-owned corporation has more than enough time to find additional sources of income to pay the 2,000 pesos monthly pension increase of its members.

“This is the same scare tactic used by the previous SSS administration. It would be well for Dooc to stop scaring the people [with] this phantom adverse effect once the current pension is increased,” added Rep. Zarate.

In response to Dooc’s statement that SSS needs to hike the members’ monthly payments to fund the pension increase, Zarate said that the House Joint Resolution No. 10 passed by the House of Representatives in 2017 mandating the SSS pension increase does not allow for an increase in premium contribution.

“The present SSS leadership has assured to institute needed reforms to improve its fund life. What happened to these reforms? Again, it is best for the SSS board and management to support the pension increase and work with Congress in looking for means to increase its current fund life,” Zarate said.

Colmenares for his part said that Dooc should stop deluding the people that SSS has no funds for the second tranche P1,000 pension increase.

“They are trying to sabotage the distribution of the P1,000 pension increase, even if it [SSS] has actually admitted several times that it has the funds for the pension increase. At most, the increase will only shorten the SSS fund life to 2026 instead of the current 2032, based on the SSS’ own computations,” Colmenares said.

Colmenares said that even if the shortened fund life is true, eight years is more than enough time for the government and SSS to find ways other than increasing members’ premium payments.

“In 2001, SSS declared that it has a fund life of only five years and yet it was able to increase this to 2042 in just 14 years. If it previously survived a five year fund life, then surely it can also survive an eight year fund life,” he said.

Colmenares said the SSS is in fact in better shape than its counterparts in United Kingdom (UK), which has a fund life of only up to 2027, and Canada, which has a fund life until 2022.

Colmenares said the SSS could instead implement the following:

  • improve collection efficiency from the employers of its 31 Million members;
  • collect the billions in contributions, which delinquent employers failed to remit in the last ten years;
  • cut down in bonuses and perks given to its Board members and collect the disallowed more than P200 Million  retirement package given to SSS Board Members in 2009; and
  • collect the fines imposed by the courts against employers who violated the SSS law.

“If these are not enough, then Congress can always provide for subsidies as provided under Section 20 of RA 8282 as amended. There is no way that the SSS will go bankrupt since under Section 21of the said law, the Philippine government guarantees the benefits and solvency of the SSS,”  Colmenares said. # (Raymund B. Villanueva)

STREETWISE: Digging deeper into the SSS pension hike by Carol Pagaduan-Araullo

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Streetwise

Speaker Feliciano R. Belmonte, Jr. justified the abrupt adjournment of Congress last Wednesday by saying he didn’t want to embarrass President Benigno S. C. Aquino III with the prospect of a move to override the presidential veto on the SSS pension hike. Not that Rep. Neri J. Colmenares, who was leading the effort to get two thirds of the House of Representatives to sign his override resolution, already had the numbers. But Mr. Belmonte apparently was not confident he could muster the vote to defeat the resolution either.

The hurried adjournment in order to prevent even a debate and much more a vote was totally unjustified. There was a quorum, there was time. Not a few of the affected citizens were present to witness their representatives’ action in their behalf. But the house leadership went to the extent of turning off the microphone while Rep. Colmenares was in the middle of arguing for a discussion and vote.

These “people’s representatives” were caught in a dilemma.

To vote to override Aquino’s veto would likely mean reduced access to Malacanang’s largesse for the coming 2016 elections. To vote against the override, in effect to vote against the pension increase, would expose them as uncaring for the plight of SSS pensioners, spineless in the face of Malacanang pressure, and as the unprincipled, opportunist, and elitist bunch of bureaucrat capitalists they really were.

That is the rotten politics of it.

But what of the economics?

Is it true that the SSS pension bill was not well thought out, that the bill sponsors and the entire Congress merely wanted to pander to what is popular in the season of elections, that they took little regard of its supposed dire effect on the SSS fund life?

For the record, Colmenares filed the bill in 2011 and it passed through the gauntlet of the congressional mill until approved in 2015. SSS top brass had all the time and the opportunity to argue their opposition to the pension increase but they failed to convince Congress. Malacanang had the time, opportunity and clout over its congressional allies to kill the bill but it didn’t.

A 4-billion deficit per year was projected with a 56-billion peso additional cost to the fund. Fund life would be reduced to 13 years from 2015 if — a big if — nothing was done to improve collections, plug leaks, raise income on idle assets, and improve the performance of investible funds.

Worse comes to worst, the national government could appropriate the necessary funds to subsidize SSS expenses in accordance with the SSS Act of 1997. Even increasing member contributions could be considered once it has been demonstrated that SSS significantly improved its services and benefits.

The long and short of it is that the SSS can actually afford the pension hike. It is a matter of priorities; a matter of political will. Clearly the Aquino administration does not consider throwing a lifeline to 2.2 million elderly SSS members a priority. Neither does it have the political will to cut corruption, bureaucratic wastage and inefficiency in the SSS itself.

Talk about inclusive growth under the Aquino administration is a lot of hot air when SSS executives are given “performance” bonuses but its members cannot partake of the gains in its investment portfolio.

The good thing about the heated debate on the P2000-peso SSS pension hike is that many people, not just senior citizens, have begun to ask questions about what ails the country’s social security system, not just the SSS but also the GSIS, and what deep-going reforms are in order.

Progressive think-tank IBON Foundation has come up with very strong arguments backed by hard data to convince us that “social insecurity” actually hounds majority of Filipinos up until their twilight years.

For one, out of 7.8 million senior citizens, IBON estimates that at least two-thirds or over 5.1 million are poor. (IBON uses a poverty threshold of Php125 per day or Php3,800 monthly whereas the Philippine Statistics Authority officially uses an unrealistic poverty threshold of just Php52 per day or some Php1,582 monthly.)

Moreover, six out of ten (57%) elderly Filipinos, or some 4.5 million, don’t receive any pension at all.

If we include those who receive pensions below a reasonable poverty threshold, this would mean almost 97% of elderly Filipinos, or around 7.5 million, cannot afford to live decently much less be able to buy costly maintenance medicines for their various illnesses.

According to IBON, “Coverage is poor because the country’s main pension schemes are designed as an individualistic mechanism more than real social security. The SSS and GSIS are contributory schemes that only cover their members, whose membership depends on member contributions, and whose level of benefit depends on the level of member contributions…But the problems of basing pensions on regular work-based contributions in the Philippine context of so much joblessness and pervasive irregular and low-paying employment are clear.”

The unemployed will certainly not be able to make any significant contributions. But not even those employed are assured of becoming active and qualified SSS members. IBON estimates six out of ten of total employed (58%) are non-regular workers, agency-hired workers, or in the informal sector with at best erratic ability to pay contributions. The problem gets worse with the rising practice of contractualization wherein workers have no security of tenure and are simply hired and rehired every six months.

IBON concludes that the only way forward is for government “to confront Philippine underdevelopment realities head-on and aim for a non-contributory tax-financed universal social security system…(S)ociety, through the government, should be assuming primary responsibility for the security of its most vulnerable citizens including the elderly. Contributory member-financed schemes such as SSS and GSIS should just be complementary measures to a central scheme designed to reach the majority of Filipinos.”

Unfortunately, so long as the neoliberal economic doctrine has a stranglehold over the mindset of our country’s political leaders, government economic policies will continue to eschew this approach to overhauling the social security system.

The so-called “free market” means every man for himself; government intervention to promote social equity and social justice are anathema; even social safety nets for the most vulnerable in society are considered burdensome and unsustainable.

The struggles of senior citizens and their families for a meaningful increase in SSS pensions are giving them valuable lessons in life. Who are with them and who are against them and why. The nature of reactionary politics in an elite-dominated society such as Philippine society. And most important of all, that meaningful changes can only take place when the exploited and oppressed unite and take matters into their own hands.

Senior citizen power is also “people power”; once unleashed, it will find its mark. #

Published in Business World
8 February 2016

STREETWISE: SSS pension hike — it’s a class thing by Carol Pagaduan-Araullo

Streetwise

I waited to hear the views of a friend, a former SSS top executive who sought a meeting with Rep. Neri Colmenares, original sponsor of the bill that seeks to raise the Social Security System (SSS) monthly pension for more than 2 million retirees by P2000. I wanted to balance out my thinking on the issue even though I had read and heard almost all there was to hear on both sides of the argument.

I wanted to give this person the benefit of the doubt since I know him to be an upright person, hardworking, a top professional in the private sector before being recruited into government service, and having come from humble beginnings. Unfortunately the more he expounded on the basic position of current SSS executives, on which basis Pres. BS Aquino vetoed the bill, the more I became unconvinced of the merit, nay soundness, of the presidential veto.

While acknowledging that the SSS fund is a social fund meant to serve the needs of its members, the former official tried to convince us that people expected too much from the fund, that the contributions were way too small while the services it was giving out were costing a lot. Ergo the basic solution is to increase the members’ contributions. In the meantime, there could be no increases in benefits that would only shorten the life of the fund.

He acknowledged, however that increasing contributions is easier said than done. The convincing would have to come in the form of more efficient and substantial services.

Now when one considers that the SSS was listed recently by the Civil Service Commission as one of the top three government agencies that they received complaints about in terms of services, doesn’t the SSS indeed have a lot of convincing to do?

Wouldn’t a reasonable increase in pensions serve as a strong signal that the agency was willing to work hard to be able to give members a decent pension when they retire?

When asked about plugging the leaks in the system like the billions of contributions collected but unremitted by employers, the former official lamented how difficult it is to do this, that SSS lacks personnel and resources.

So how can SSS convince its members that they need to give more when what they are already contributing is not collected properly by SSS. (Or as one struggling entrepreneur counter-lamented, it takes SSS forever to officially tally contributions in their data base from the time the payments are deposited in receiving banks. In the meantime their employees cannot take out any loans and vent their ire on their employers!)

About the touted sterling performance of the SSS in terms of fund management under the stewardship of SSS President De Quiros, my friend intimated that there were SSS properties that were not sold during earlier administrations in order to have higher returns with the property boom in certain areas of Metro Manila. This certainly didn’t seem to take such a financial genius to figure out; that it was quite a matter of waiting for a better price.

In the meantime, .isn’t it unconscionable for SSS executives to give themselves such fat bonuses on the ground that they made the fund grow through their supposedly astute handling of SSS investible funds when they refuse to let the ordinary members share in some of that purported growth. On this point my friend couldn’t help but nod in agreement.

Rep. Colmenares came quite prepared for the one-on-one discussion bringing with him documents that the SSS had submitted to congressional hearings. He had the facts and figures at his finger tips. He questioned the sudden jump in the projected fund deficit to 16-26 billion pesos when SSS officials had stated under oath in congressional hearings this would amount to only 4 billion pesos.

Congress had passed Colmenares’ bill unanimously having taken into account the 4 billion deficit and the ways by which the SSS could cover this by introducing needed reforms within the next five years, including improvement in collections and lessening administrative inefficiencies and costs. And if, despite all these internal reform measures the deficit remained, government is mandated to shore up the fund by means of a direct subsidy.

Indeed, if government can subsidize a dole-out program such as the Conditional Cash Transfer worth 62 billion pesos, why can’t it provide a safety net for working people who are doing their share not only in contributing to the economy but to their own social security fund .

It has also been pointed out by various quarters that with the Aquino administration’s boast of a 268 billion peso reduction in the government’s budget deficit, it has more than enough leeway to back up the P56B for the pension hike plus the alleged projected P16-26B SSS deficit.

How convenient — or deceptive as the case may be — for SSS executives to belatedly come up with such a humongous figure of 16-26 billion pesos in fund deficit that would purportedly run the SSS fund to the ground in 13 years.

This report apparently stunned and scared Pres. Aquino — during the four years the bill was being deliberated apparently he took no notice of it and its supposed dire implications — into action. He obviously took the SSS executives’ word hook, line and sinker, enough for him to issue the politically unpalatable veto

Thereupon the entire Malacanang propaganda machinery was made to work overtime to spread the scare to the rest of the public, most especially to SSS non-pensioners who the Aquino administration wants to dupe into believing that there will be nothing left for them when it is their turn to retire.

Big business honchos, top-caliber professionals in the financial sector and neoliberal academics and pundits who think government subsidy is anathema to the “free market” have swallowed the bankruptcy scare hook, line and sinker too. One wonders why they have chosen to suspend their usual sharp analytical abilities in this instance.

The reason is not hard to fathom. They regard the SSS not as a social fund but as a huge capital fund that one necessarily subjects to actuarial studies regarding its projected life.
Thus the point is reduced to how to ensure that more comes in than what goes out.

Yes, even as hundreds of billions of the SSS fund are a plump source of income for a train of fund managers, stock brokers, investment bankers, accounting firms and the like.

In the final analysis, the two sides to this issue amounts to a class divide. The less in life can’t understand the reason for the presidential veto. Those who can nonchalantly spend 2000 pesos and more on dinner-for-two at a fancy restaurant can’t appreciate the clamor for a pension increase in their lifetime.

Published in Business World
1 February 2016

Senior citizens hold rally vs Aquino’s veto of SSS pension increase

Thousands of senior citizens and Social Security System pensioners held a rally at Quezon Memorial Circle last January 30 to call for an override of the presidential veto of the P2,000 monthly pension increase.

They collectively condemned President Aquino as disrespectful of old people who rely on their pensions for their daily needs.

SSS pensioners: Increase important for our dignity

Senior citizens trooped to the House of Representatives a few days after President Benigno Aquino vetoed the bill for a two thousand peso increase in the monthly pension of member-retirees. They are asking Congress to override the veto by reenacting the measure through a two-thirds vote.

The pensioners said that the increase would have help them reclaim some of their dignity that has been affected by the small amounts they receive from the social security agency.

How to break the heart of SSS pensioners


Pres. Aquino should have seen them before he vetoed the P2,000 pension increase passed by both Houses of Congress. Pensioners protested at Mendiola leading towards the Presidential Palace on January 15, 2016.

Neri, aprub sa taong bayan para sa senado

Nagpasa na ng certificate of candidacy (COC) si Bayan Muna Representative Neri Colmenares para sa kanyang pagtakbo bilang senador sa opisina ng Commission on Elections (COMELEC) noong Oktubre 12. Umaga pa lamang kasama na niya ang maraming mga kaibigan, kamag-anak at mga tagasuporta. Nagmartsa sila mula sa National Press Club (NPC) patungong tanggapan ng COMELEC sa Maynila. Dumating din ang artistang si Angel Locsin o Angelica Colmenares sa tunay na buhay para suportahan ang pamangkin.

Manila
October 12, 2015