The Social Security System’s (SSS) awaited pension hike may once again be postponed as officials from the state-run insurance program demand for a “funding mechanism” to sustain and prolong the fund’s life.
SSS President and CEO Emilio de Quiros, Jr. disclosed on Tuesday that the promise to increase the monthly pension for retirees is only feasible if there is an additional capital fund, with a corresponding increase in contribution payment.
“I think they’re willing to look at the whole financial situation and on what funding mechanism they can come up with (to fund the rate hikes),” Business World reported de Quiros, Jr as saying at the anniversary of the Philippine Life Insurance Association Inc. (PLIA).
“What we’re saying is you need to have a funding mechanism, otherwise you shorten the life of the fund.” The CEO added.
He also called on the administration to come up with any ways to fill in the P56 billion additional annual budget for the proposed pension hike.
The proposal aims to raise the monthly pension to P3,200-P4,400 from its current P1,200-P2,400 a month for those who have remitted to the agency within 10 to 20 years. This increase is estimated to shorten the fund life by 13 years from its current life span of up to 26 years or until 2042.
It can be recalled that then-president Benigno Aquino vetoed the proposal on Jan. 12 due to its threat to financial securities.
Meanwhile, SSS has further deepened its partnership initiatives to extend its social protection to informal sector workers.
Among its ongoing initiatives is the AlkanSSSya Program which has listed over 120,000 members and recorded P310.86 million in contributions by the end of March. This is a 95 percent increase from the P159.02 million contributions in the same period of 2015.
According to the Philippine Information Agency (PIA), AlkanSSSya Program taps a micro-savings scheme which enables informal sector workers to complete their monthly contribution of P330 with as little as P11 per day,
Each contributor has at least one AlkanSSSya unit, which contains secure individual compartments that store the members’ personal SSS savings until their scheduled monthly counting and remittance to SSS.
What do you think of the proposed “funding mechanism” to push Pension hike plans? Let us know in the comments section below.