IMPROVING SSS FINANCES SO IT CAN FUND BENEFITS INCREASE
Excerpts from Senate President Pro-Tempore Ralph G. Recto's
Sponsorship Speech of the SSS Pension Hike Bill

INCREASE MEMBERSHIP BASE

Pagpapalaganap na ang pagiging miyembro ng SSS ay magandang investment na malaki ang balik sa puhunan.

With regard to funding the higher benefits, increasing its membership base is among the most plausible solution to improve revenue collections. One estimate pegs at only 30 percent the number of employees who ought to be SSS members under the law. In other words, 70 percent of potential members are not captured by the system.

Although they cannot be compelled to be members, I believe we can raise social security compliance by marketing SSS membership as an investment instrument with a high ROI.

Expanding the base is essential to its sustainability. The more active worker per pensioner, the healthier the books of a pension system is and the brighter its future would be.

IMPROVE COLLECTION EFFICIENCY

Paghabol sa mga employer na hindi naghuhulog ng tamang kontribusyon ng SSS members nito.

The SSS contribution is a payroll tax. But unlike conventional taxes, it is inflicted on both the employee and the employer. And as a tax, its payment is compulsory in nature, which is why it is withheld at source, and its evasion, if done by an employer, sanctionable.

Under the current scheme, every one peso plunked in by the employee is matched by his employer's share of two pesos. So an employee who earns P16,000 a month contributes P1,790 monthly to the SSS - P582 out of his pay, and P1208 out of his boss's profit.

On paper, there are 32.5 million SSS members who fork over their one-third share monthly. And 921,825 employers who give their two-thirds equity. But according to the SSS, only one-third, or between 10 to 11 million, of its 32.5 million registered members are paying. The rest, or about 21 million, are either in arrears, or have abandoned, or have developed amnesia on their social security obligations.

SAVE MORE TO REAP HIGHER YIELDS

Pagreporma sa ahensya upang maging malikhain sa pagbuo ng isang contribution schedule para humaba ang buhay ng pondo nito at maging patas ang paraan ng kontribusyon.

In order to provide the present pensioners better benefits and at the same time ensuring that the future retirement benefits of current members will be at a better rate, the SSS can institute structural reforms and be more creative in devising a Contribution Schedule in order to increase the fund life and introduce a more equitable contribution scheme.

In fact, theoretically, improving its collection efficiency can even result in lower contribution schedule for members.

The SSS can also consider seriously other forms of investments in order to increase its revenues from its investible funds as may be allowed by its charter.

LIFTING OF STATUTORY CAP

Pag-alis ng limit sa pinakamataas sa salary bracket upang mabigyan ng pagkakataon ang mga SSS members na may kakayanan na maglagak ng mas malaking kontribusyon.

For those who want to contribute more, they should be allowed to do so. For those who want to save more, so they would reap higher yields, they should not be prevented from doing so.

At the moment, there is a statutory cap in the computation of the monthly contribution pegged at the maximum of P16,000 monthly salary credit. Hence, salaries higher than this amount are required to contribute the same amount of P1,790.

Under the present scheme, a clerk who earns P16,000 monthly will have a contribution of P1,790 monthly or 11 percent of his salary, while a manager, for instance, with a salary amounting to P90,000 will also have the same contribution of P1,790 or only 2 percent of his salary.

The SSS contribution is considered a payroll tax; however, its schedule does not mimic the features of a progressive tax system. The SSS can therefore consider lifting the cap on the highest salary bracket and design an optional contribution schedule such that those receiving higher salaries can have the option to contribute a higher percentage of their salary.

DIVERSIFY INVESTMENT PORTFOLIO

Mamuhunan sa mga imprastraktura tulad ng airport, seaport, MRT, LRT, toll road, tubig at kuryente na nagbibigay ng mas malaking kita

It should tap income potentials in the PPP sector. If private companies are lured by the returns in these government-backed projects, then SSS should explore them too.