MANILA—Amid controversies hounding the PHP1,000 hike in the monthly pension of all pensioners under the Social Security System (SSS), a senator on Wednesday urged the state-run pension fund to address operational inefficiencies particularly increasing the contribution of SSS members.
Senator Sherwin “Win” Gatchalian said the 24.3 percent expenses-to-income ratio of SSS was far larger than that of comparable social insurance institutions within Association of Southeast Asian Nations (ASEAN).
This includes the local Government Service Insurance System (10.1 percent), Malaysia’s Employees’ Provident Fund (3.21 percent), and Singapore’s Central Provident Fund (2.51 percent).
Gatchalian further said that SSS is not meeting the high standard of financial management and operational efficiency set by similar institutions within the region.
“It even earns less than half of the annual income of GSIS despite spending more money. Simply put, SSS is being left behind by its peers,” said Gatchalian.
He stressed that the SSS management also failed to provide the kind of results its pensioners deserve and threatened to look for more capable leaders to replace them.
The neophyte senator estimated that SSS could generate an additional PHP6 to 9 billion per year in savings and revenue by reducing operating expenses and minimizing collection leakages.
He meanwhile urged SSS to correct its over-exposure to short and medium-term member loans, which according to the 2015 COA Audit Report amounted to 15.3 percent of its reserves, well above the 10 percent cap imposed by the SSS Law.
In the same audit report, COA assessed the value of delinquent member loans to be PHP41.9 billion, PHP22.4 billion of which had been delinquent for five or more years.
Gatchalian, who had earlier filed a Senate bill seeking to implement an across-the-board increase in SSS pensions by PHP2000 per month, however, commended President Pres. Rodrigo Duterte for approving the increase despite previously indicating that he would not support it.
“While I commend President Duterte for coming to a compromise on this issue, it is also critical that we do not let the management of SSS take the easy way out by simply increasing contribution levels,” Gatchalian said.
“The SSS needs to put its house in order to make sure that it does not waste contributors’ money,” he added.
The release of the pension would come in two tranches — the initial PHP1,000 increase this month will be the first tranche while the additional PHP1,000 in 2022 or earlier will be the second tranche.
Pres. Duterte approved a pension hike for SSS members along with a corresponding increase in contributions on Tuesday (January 10).