Pension Hike Bill Will Cause A Reversal Of Gains –SSS

The Social Security System (SSS) defended President Benigno S. Aquino III’s decision to veto House Bill No. 5842 which seeks a Php2,000 across-the-board pension hike, noting that such increase would trigger a reversal of gains achieved since 2010 by the present administration.

In a press conference held on Monday at the SSS Corporate Headquarters in Quezon City, SSS President and Chief Executive Officer (CEO) Emilio S. de Quiros said that the Php2,000 pension increase would cause a complete turnaround and negate gains attained under the Aquino administration.

The SSS executive highlighted that the SSS average net revenue quadrupled to Php33 billion from 2010 to 2014, much higher than the average Php8 billion net revenue from 2000 to 2009.

He said that SSS assets have grown by 50 percent, from Php298 billion as of 2010 to Php447 billion as of October 2015.

However, with 2.8 million pensioners, the Php2,000 pension increase would require an additional funding of Php4.3 billion per month, or a total of Php56 billion payout per year, De Quiros stressed.

A projected net loss of Php26 billion will be incurred for 2016, instead of the projected net revenue of Php41 billion for the same year.

The SSS gives an average of 22 years of pension not only to members but also their dependents.

“Babagsak din ang investment income from Php30 billion to Php19 billion (The investment income will also drop from Php30 billion to Php19 billion,” De Quiros said.

To provide for the system’s cash needs, the SSS would need to liquidate Php47 billion to Php51 billion in financial assets, leading to a Php19 billion drop in investment income for 2016.

In addition, the pension hike would shorten the SSS fund life from year 2042 to 2029 and would further decrease to 2027 due to the low market sentiment and divestment plan.

“In 11 years, ubos na ang pera ng SSS (In 11 years, SSS will be bankrupt),” De Quiros said. (PNA) SCS/FMC/SGP