By Hannah Torregoza
Senator Nancy Binay on Sunday called on the Social Security System (SSS) to defer its plan to increase members’ monthly contribution, saying the state-run social insurance agency should give workers space to breathe following the implementation of the government’s tax reform law.
Binay is referring to the SSS plan to impose a three percentage points increase—from the existing 11 percent to 14 percent—on monthly contribution.
The senator said she hopes the SSS will suspend this plan and explore other options before it proposes an increase in SSS contributions.
She said any extra income that members received due to some exemptions from paying personal income taxes under the Tax Reform for Acceleration and Inclusion Act (TRAIN) will only be lost due to SSS’ move.
“Kung ano man ang konting ginhawa dahil sa adjustment sa personal income tax, mawawala din dahil sa planong itaas ang SSS contribution (Whatever gains they are supposed to have due to the adjustment on personal income tax would only be lost due to their plan to increase SSS contribution),” Binay said.
“Ipakita muna ng SSS na tapat silang bigyan ng magandang serbisyo ang kanilang mga miyembro, habulin ang mga delinquent accounts, at bigyan tugon ang mga reklamo ng pensioners at sa mga nag-aapply ng loan—then, let’s talk business, (SSS should first show they can be trusted to deliver better services to their members, and run after those who have delinquent accounts and they should also look into the complaints of pensioners and those applying for a loan – then let’s talk business),” she stressed.
Binay pointed out SSS has failed to deliver financial security to its members due to perennial misusage of the state pension fund. With the consequent mismanagement of SSS funds, she said SSS “also has utterly lost the high ground.”
“Tama bang ibigay ang pasanin sa mga SSS members na kung tutuusin, ang SSS mismo ang maraming mga pagkukulang? (Is it right for the members to shoulder the SSS officials’ liabilities?”
“Bakit hindi nila habulin ang bilyung-bilyong pisong (Why don’t they go after those who have billions of pesos of) unremitted and uncollected premiums from delinquent employers and non-compliant companies?” said Binay, who is one of the senators who earlier filed a bill calling for the increase in SSS pensions and other benefits.
She said the management should first look into strengthening its collection system and crack down on delinquent employers. The SSS should also ensure that borrowers are able to pay their loans on time.
During the joint hearing of the Senate committees on government corporations and labor and employment, Binay said it turned out that SSS has around 8.3 million delinquent members who have a backlog of P42.7-billion.
“Principal pa lang po iyon, at may interes na P25.3-billion, (And that’s only the principal, they still have an interest of P25.3-billion),” Binay said.
She also said SSS should run after establishments and companies who “under-report” or do not report their contributions to the pension fund.
“May mga establishments at kumpanya po na para makabawas sa kontribusyon ay hindi nagrereport o di kaya ay nagrereport ng mas mababang remittance kaysa sa tama, (There are establishments and companies who resort non-reporting or underreporting to lessen their contributions),” she said.
Under the social security law,the employer shoulders 7.37% of the present 11% contribution rate, while the employee chips in 3.63%.
She urged the SSS officials to look at successful social insurance models in other countries like Australia’s Superannuation Guarantee Program which SSS can study and adopt.
Superannuation program requires employers to divert three percent of most workers’ salaries into regulated retirement accounts supported by employers and matched by the government. Employers, in return, get tax incentives.
“The SSS needs to reform itself and kick-start sustainable programs that will translate to better benefits, higher pensions, improved quality of customer service, and motivate members to support the pension fund,” she said.
“These are but small steps that will bring back the people’s confidence in SSS,” Binay stressed.