A pension increase for Social Security System members may not come unless there is a corresponding adjustment in contributions, the National Economic Development Authority (NEDA) said on Friday. The statement comes after reports that President Rodrigo Duterte remains undecided on whether to approve the proposed pension increase in two tranches beginning January 2017.
Here’s why the increased SSS pension may not come as early as 2017.
SSS pension hike requires contribution increase
NEDA Secretary Ernesto Pernia reiterated on Friday that if a pension increase would be implemented without a contribution adjustment, the life of the pension fund would be cut to as short as 25 years from 42 years.
“It’s really as no-brainer in terms of what to do. There’s no such thing as a free lunch. Somebody will have to bear the cost,” Pernia said in an interview with ABS-CBN News Channel.
“The prudent thing to do is really to make the members raise their contributions as well as the employers,” the secretary noted.
He mentioned that member and employer contributions have been swelled thrice while pension payouts have been raised 22 times since the rates were established in 1980.
Duterte sees compromise on SSS pension hike
Earlier, President Duterte admitted he is still studying whether to approve the SSS proposal to increase the pension of its members in two tranches. In an interview with ABS-CBN, he disclosed that some of his Cabinet members are debating on whether the pension increase would be good for the state-run insurance institution.
Although he acknowledges the adverse effects the increase pension might bring to SSS, Duterte assured that he has to keep his campaign promise to SSS members that he would implement an increase in their pension. Former president Benigno Aquino III vetoed a similar proposed measure from Congress increasing the pension of SSS members by P2000, saying that the institution won’t be able to handle the hike.
The announcement came as the SSS is set to release the first tranche of P2000 in January. The institution is poised to implement a staggered P2000 across-the-board increase in its monthly payments to member-pensioners which has now reached to 2.2 million. The first tranche of P1000 in January will be followed by another P1000 in January 2019.
What do you think of the possibility that the increased pension hike may not come as early as January 2017? Let us know in the comments section below.