DAVAO CITY – President Benigno Aquino III’s veto on the Social Security System pension hike bill sent bad quivers for many pensioners here on Thursday.
Manuel Abellana, Sr., 78, said he needs to share his P4,300 monthly pension with his wife for their daily needs. “It’s not even enough for our food,” he said.
Abellana said he is now sickly and needs to source his medications from his pension making it more difficult for them to make ends meet every day, if not for their children who gives them financial support.
“I’m just an employee, so my pension is not the same as those who served as manager. I only receive minimum,” said Abellana.
“If I don’t have children, my P4,300 pension is really not enough. Utilities like electricity and water is costly, I was lucky I have a small hut so we do not have to pay for rent,” he said.
Flora Lee, 71, receives P1,900 monthly from her late husband’s pension who was an SSS member.
Lee, who is from Digos City, said the meager pension is spent not just for her needs, but for the needs of her children and grandchildren as well.
While staying here in Davao, Lee is working as a part-time street sweeper to augment the meager pension she receives.
Lee also told Davao Today that because her salary as a street-sweeper is most of the times delayed, she approaches financers to whom she loans her ATM.
Antonio Lopez, 63, and a resident of SIR village paid his SSS membership fund for 10 years. He was a goldsmith since he was 18 years old and receives a monthly pension of P6,700.
Although he cannot do anything about it, Lopez said he still hopes the decision of the president will be reverted.
In a statement, Communication Secretary Herminio Coloma, Jr. noted that in his message, President Aquino “pointed out that the stability of the entire SSS benefit system, whose present membership comprises about 31 million individuals, will be seriously compromised in favor of two million pensioners and their dependents.”
He quoted the President as stating that “the P2,000 across-the-board pension increase with a corresponding adjustment of the minimum monthly pension will result in substantial negative income for the SSS.More specifically, the proposed pension increase of P2,000 per retiree, multiplied by the present number of more than two million pensioners, will result in a total payout of P56 billion annually. Compared against annual investment income of P30 billion to P40 billion, such total payment for pensioners will yield a deficit of P16 billion – P26 billion annually.”
“In view of this, President Aquino said the SSS will be constrained to draw from and use its Investment Reserve Fund (IRF) to support the pension increase and as a result, ‘the IRF will diminish over the years, eventually reaching zero by the year 2029’,” Coloma said.
However, a labor non-government organization believes that the state pension fund has enough financial resources to shoulder the pension hike.
Ecumenical Institute for Labor Education and Research, Inc. (EILER) disputed Malacanang’s claim that the SSS pension hike will result in a deficit.
“Malacañang did the wrong computation to make it appear that the cost of the SSS pension hike outweighs SSS income from investments. If we include total contributions aside from income from investments, it will be clear that SSS has more than enough funds to finance the pension increase,” EILER research coordinator Carlos Maningat said.
Maningat said SSS total revenues, which consist of members’ contributions and income from investments, amount to P160 billion annually on average.
“This sum is way bigger than the projected annual payout of P56 billion for SSS pensioners. Aside from its annual revenues, SSS has also over P428 billion in investment reserve funds as of April 2015 which is being invested in equities, bank deposits, securities and real estate,” said Maningat.
“With billions in investment reserve funds, increasing income from investments, and growing contributions from a widening member base, SSS is definitely poised to extend its fund life. There is no way that the state pension fund will go bankrupt just because of the pension hike,” he said.
Based on EILER’s study on social protection, Maningat said “it is clear that contribution collections continued to outpace benefit payments, yielding a contribution surplus of P11.6 billion in 2013, 16 times higher than the surplus posted in 2012 and five times more than the surplus earned in 2010.”
The group said the government has no counterpart or subsidy in the pension fund, and yet the national government allocates billions for sovereign guarantees for private firms.
“The long-awaited pension hike had to go through the whole legislation process only to be vetoed by the President, while SSS executives award themselves humongous bonuses and put our workers’ hard-earned money to risky investments.”
On June 2015, the Commission on Audit ordered SSS to return around P71.612 million of unauthorized bonuses.
Based on COA’s annual Report on Salaries and Allowances, SSS officials are among the top paid government employees in the country.
Both Abellana and Lee said they are appealing to the President to revert his decision.
“I hope President Aquino will be more compassionate to the poor who only receives small salary and small pension. But his compassion is nowhere in sight, he immediately vetoed the bill,” said Lee.
Maningat said they are calling on both House and the Senate “to stand with the workers and override the President’s veto of the SSS pension hike bill.” (With reports from Kristine Ina Magdosa and Evangeline Adalid/davaotoday.com)