Social (in)Security

 

sss_pensioner_jan2016

Photo source: Bulatlat.com

Before the infamous presidential veto of House Bill 5842, I was hoping for the best but was prepared for the worst.

The mental conditioning helped; but the feeling of disappointment—when the axe fell– was real. I just wasn’t sure whom to hold culpable for the sad state of my monthly benefit: a measly sum that briefly touches my palms before it finds its way to my favorite generics pharmacy.

Was it the ‘heartless’ President? The legislators/politicians whose moves are sometimes laced with ulterior motives? Some overperked and overbonused SSS officials? The system which, unfortunately, cannot defend itself? Or the natural disasters that besiege this country and cause sizeable funds to be allotted for calamity loans, when it could otherwise be channeled to the pension fund?

Thanks to three well-respected minds, the bitter pill became easier to swallow. Solita Monsod, Cielito Habito, and Gerardo Sicat—all of them economists and previous heads of the National Economic and Development Authority (NEDA)—believe that while shooting down the proposed pension increase was unpopular, it was the right thing to do after proper actuarial analysis.

They have other sobering insights:

On why SSS members have smaller pensions:

Monsod: “Government employees contribute 9 percent of their income every month to the GSIS. The private-sector employees contribute only 3.63 percent of theirs to the SSS.

…The government contributes 12 percent of income as its contribution, so the total is 21 percent. In the SSS, employers pay 7.36 percent, so the total is 11 percent. If the private sector wants larger pensions, it should contribute larger amounts.”

(Ouch!)

On pushing the bill as a political game:

Sicat: “Populist causes are often in this mode. Politicians sponsor them in order to earn “pogi” points to crown their laurels. They aspire to be responsive to popular needs.

If their solutions to public clamor lead to new problems, they kick those problems down the road for later administrations to solve. In doing so, they endanger institutions, they postpone or destroy the road to economic prosperity.

The SSS pension increase is just an example of this. The Congress passed a bill imposing an additional pension for all retirees but irresponsibly failed to provide the means by which it would cover that additional benefit.”

Habito: “…That is why the executive has long pushed for a fiscal responsibility law, a key provision of which will stop enactment of laws that create more spending without providing for revenue-generating or expenditure-reducing measures to fund it. Otherwise, lawmakers may keep driving the country deeper into debt, whose long-run implications need little explanation. It’s often lamented that politicians only care for results visible within their short political terms; after all, future generations of voters are of no use to them. Short-run thinking is thus a habit that our politicians will always find hard to shake.”

Still, there are issues that beg explanations. Foremost, SSS officials get unauthorized bonuses and compensation packages that are much too generous. Business columnist Boo Chanco, in his Demand and Supply column in the Philippine Star today, asks the same questions that rankle many seniors like me:

  • Does SSS need its platoon of 2 EVPs, 7 SVPs, 16 VPs and who knows how many senior managers?
  • What do all those senior officials of SSS do to justify their compensation?
  • Ironically, SSS officials and staff are members of GSIS and get far more benefits than what SSS members get. … Why is it like that? How can they fix the disparity?

And too difficult to be glossed over: the billions worth of uncollected contributions and idle assets.

In an earlier item, Mr. Chanco suggested:

“Or maybe the time is ripe for a unified social security system combining the pool of government and private sector workers under one set of rules as in many countries.”

Why ever NOT, coconut? When there is no compelling difference between a ‘public servant’ and a private sector employee who had worked the same number of years, why the disparity in their retirement benefits? Both were servants, period.

SSS needs serious fixing to make it more relevant to its members.

Serious, YES. Shortsighted and Self-serving, NO.

 

 

 

 

 

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