Credit to Author: clopez| Date: Wed, 20 Feb 2019 21:30:37 +0000
Two party-list groups on Wednesday asked the Social Security System (SSS), which handles the pension fund for workers in the private sector, to explain the P437 billion in uncollected contributions and penalties before it starts raising contribution rates.
Bayan Muna chair Neri Colmenares said SSS members should not allow the pension fund to flex its new powers under Republic Act No. 11199, or the Social Security System Rationalization Act, without correcting losses borne from years of “collection inefficiency.”
“The SSS does not have the moral authority to increase contribution under the new law if it has failed to collect all uncollected contributions under the old scheme,” he said at a press briefing.
President Rodrigo Duterte on Feb. 7 signed RA 11199, which repealed Republic Act No. 8282, the old SSS law.
RA 11199 allows the SSS to expand its investing capacity and generate more revenue for members and pensioners.
Gabriela Women’s party-list group expressed concern the new law would lead to hefty SSS contribution hikes that would further slash the meager wages of workers.
“The new charter allows the SSS to bank on the wages of members supposedly to prolong the life of the agency, instead of improving its collection efficiency and getting rid of the bonuses to its board members,” said Rep. Arlene Brosas.
The new law provides for a gradual increase in monthly contributions from the current 11 percent of the monthly salary credit. The contribution rate will go up by 1 percentage point starting this year until it reaches 15 percent in 2025.
A salary credit is the compensation base for contributions and benefits related to the total earnings for the month.
Extending fund life
The law also allowed the gradual adjustment of minimum monthly salary credit from P2,000 in 2019 to P5,000 in 2025 and maximum monthly salary credit from P20,000 in 2019 to P35,000 in 2025.
At least two-thirds of the contribution rate increase would be shouldered by the employer.
The additional collection would replenish the SSS fund in six years. With higher contributions, the SSS fund life would be extended until 2038.
The SSS fund life was slashed by 10 years to 2032 when the additional P1,000 monthly pension was granted to pensioners in 2017.
The law also lowered the penalty rate for late payment of contributions to 2 percent from the current 3 percent.
Citing figures from Commission on Audit (COA), Colmenares said the SSS had not fully explained to the public why it failed to collect premiums and penalties since 2010 totaling some P437 billion.
As of August 2018, the SSS had at least P13 billion in unremitted contributions from employers, aside from the P78.95 billion in uncollected outstanding loans from members.
“I have written SSS President (Emmanuel) Dooc three times, asking for explanation on these uncollected premiums, and they did not bother to answer,” he said.
In 2010, the SSS declared that its unremitted premium contributions had reached P109 billion, while the penalties had risen to P280 billion.
“Why does the SSS allow this and yet they are so obsessed with increasing personal contributions?”
Any uncollected premium is a triple whammy for workers, according to Colmenares.
Employers deduct outright premiums from workers’ low wages yet, employers do not remit these to the SSS, resulting in a loss of medical benefits for the workers.
Over the years, the SSS has been repeatedly called out by the state audit body for uncollected loans and illegal disbursement of benefits to its officials and employees.
Last year, the COA urged the SSS to improve its collection of P79 billion in members’ outstanding loans.
Months later in December last year, the state audit agency ordered high-ranking officials of the SSS to return more than P71 million in excess benefits granted to employees of its branches in Metro Manila in 2010.
Colmenares belied SSS claims of improving collection efficiency, as COA reports showed that its P8 billion uncollected premiums from about 38,000 employers in 2016 rose to P13.8 billion involving more than 122,650 employers.
The SSS president also needs to explain a number of investment actions the SSS performed, Colmenares said, which have been questioned by the COA.
Instead of aiming for increases in members’ contributions, the SSS should first work to improve its collection rate efficiency, make wiser investment decisions and cut down on “unnecessary bonuses” for officials and “excessive operations costs.” —With a report from Inquirer Research