The state-run Social Security System (SSS) on Friday said it will beef up its efforts to reach out to informal sector workers and provide them with meaningful social security protection following the results of an Australian-based survey ranked the Philippines as one of the pension systems that need improvement out of the 37 countries in the study.
SSS President and Chief Executive Officer Aurora C. Ignacio acknowledged that one of the huge challenges for the state-run pension fund is to ensure universal protection for a large number of workers in the informal economy such as farmers, fisherfolks, market vendors, and alike.
Based on the latest International Labor Organization’s survey, the Philippines’ informal employment from 2008 to 2017 was recorded at 21.1 million or 56 percent of the labor force.
SSS data showed that members registered under its program for the informal sector, dubbed as AlkanSSSya, only stands at 108,779, as of September 2019. Likewise, 44,093 members were registered through the Cooperative Accreditation Program and 230,069 members were covered as job order personnel of the government offices.
“For many years now, we have been reaching out to them, strongly encouraging them to pay their SSS which is the cheapest and most accessible retirement savings today.
But their varied work arrangements and at times, intermittent income, prevent them from regularly paying SSS premiums.
A challenge for us now is to create a special pension fund program for informal sector workers like farmers, fisherfolks, among other groups, considering their income spread.
These are the areas that SSS will look into,” Ignacio said.
Ignacio added that the Mercer Global Pension Index which included the Philippines in its 11th global survey on pension systems puts social security protection at the forefront of social issues today.
“Many Filipinos see social security protection as just an option during their working years, neglecting the fact that this will be one of their supplemental supports during retirement,” she continued.
The Philippines, based on the index, was rated 43.7 out of 100. It has a grade “D” together with first world countries Korea, China, and Japan among others.
The Philippine pension system was described with some desirable features but also with major weaknesses that need to be addressed.
“It is the first time that the Philippines was included in the study, but it already highlights the need for urgent actions to prioritize social security protection for all Filipinos.
The lifeblood of SSS is the members’ contributions. In the past 62 years, SSS has sustained its funds without any need for government subsidies and shows that the fund has been well-managed over the years.
The inter-generational subsidy has sustained the pension fund where the healthy supports the sick while those who earn more subsidizes those with less in life.
As shown in the study, those countries with the highest tier provide higher benefits since their contributions are also higher,” she explained.
Data showed that from January to August 2019, SSS has so far released P129.53 billion in benefit payments.
Out of the total expenditures for the seven SSS benefits, more than 58 percent was disbursed for retirement benefits amounting to P75.11 billion.
Ignacio explained that SSS pension is meager in terms of amount, but the actual return of every peso being contributed is high.
