Hearing of the Committee on Government Corporations and Public Enterprises on 26 January 2021 10:00 am
Fellow workers in Government; and
Mabuting araw po sa ating lahat!
We thank Chairperson Richard Gordon for giving us this opportunity to share our thoughts and position on several Senate Bills proposing to defer or stop the implementation of the increase in SSS contributions authorized under Republic Act No. 11199 or the Social Security Act of 2018.
We are respectfully submitting to the Committee our institutional comments on these bills together with the most relevant data and information that support them.
At the outset, we would like to state that the provisions of the bills tend to imperil the sustained payment of benefits to members, rather than strengthen their SSS Fund, especially in these difficult times.
Currently, the long-term solvency of SSS is already threatened with trillions in unfunded liability. In simple terms, there is insufficient fund to enable us to support payment for the next generation of pensioners.
It would take decades of reforms implementation before we can make any significant dent on the unfunded liability. They must be implemented slowly and gradually. Delaying implementation of any reform will worsen an already dire financial situation.
And the longer the adjustment in contribution rate is delayed, the higher the contribution rate will be that needs to be implemented.
The new contribution schedule in the SSS Charter is a long overdue reform. SSS has increased its pension benefit 25 times while it adjusted contribution rate only 8 times to date.
The SSS has likewise expanded benefits with no corresponding additional funding. These are the additional P1,000 monthly benefit allowance, expanded maternity benefit and unemployment insurance benefit.
The SSS, therefore, respectfully appeals for support to our position not to defer the implementation of the 2021 scheduled adjustments.
By implementing the scheduled increase in member contributions, the SSS will gain the opportunity to address its dire financial position.
Specifically, this action will enable the institution to:
- Generate new funding in the amount of P41.37-B;
- Realize a projected fund surplus, starting at P27.22-B in Y2021 (If the reforms are not implemented, SSS is projected to experience deficit in the amount of P14.90B for the same year); and
- Stop the further buildup of unfunded liability.
The additional monthly contributions are relatively small. They range from P15 to P100 for employed members, from P30 to P200 for self-employed and voluntary members, and from P80 to P200 for OFW members.
But these amounts will redound eventually to proportionately larger benefits to members in the future.
At this time of the COViD-19 pandemic, when members and pensioners have clamored for heightened benefits, including allowable loans, we would expect that proposed measures should clearly strengthen the SSS, not weaken it financially.
Stopping the collection of the new amounts would prevent SSS from achieving its long-term goal of solvency and financial stability.
As administrators of the SSS Fund, we take very seriously the obligations reposed upon us by the SSS Charter.
This is the time for national solidarity and for our Bayanihan spirit to support the people’s social security program. We therefore urge everyone to join us as we continue to perform faithfully and more effectively our fiduciary duty to shore up the capacities of the SSS and secure the members in times of unwanted shock situations and contingencies in their lives.
Let us continue to ensure the viability of this responsive lifeline that the SSS members themselves created and maintain through their hard-earned contributions.
We earnestly reiterate our request to Your Honors to support our efforts to vitalize the SSS and better serve our current and future members.
Maraming salamat at magandang umaga.