The Market Monitor Minding the Nation's Business
State pension fund Social Security System (SSS) urged private firms to design benefit programs that will meet their workers’ needs aside from the social protection provided by state-run pension funds.
SSS President and Chief Executive Officer Emmanuel Dooc said that in these times of globalization and workforce mobility, companies need to be equally adept in designing benefit programs that meet their workers’ needs and provide incentives for them to stay in the company, as well as attract valuable new talent.
“Company-sponsored benefits serve these purposes and can adequately protect workers, if designed and funded correctly,” Dooc said during his presentation in the 17th Lockton Global Benefits Forum held in Makati City.
Dooc, in his presentation, also stressed out that private companies and state-run pension fund like the SSS are far from being each other’s competitors.
“The private insurance industry and our institution are not in competition – far from it. We form two of the four pillars of social protection that keep the citizenry from falling into despair when hardships arise,” he said.
Dooc said that the four pillars of social protection were social assistance, social insurance, provident fund system and voluntary and privately-managed plans. These pillars, according to the SSS chief, were bound by two common goals: to provide emotional and financial security to insured clients or members in their time of need and through investment activities, to assist in the country’s economic development.
Dooc also discussed a report published by the United States Social Security Administration in 2014 covering 177 countries in the Asia-Pacific region, including the Philippines.
Based on the report, Australia gave the highest pension to its members that reaches to as high as P69,000 per month while Bangladesh gave the lowest pension at P168 pension per month.
The Philippines, meanwhile, lies along the countries with lower monthly pension at P1,200 per month before the additional P1,000 benefit for pensioners was implemented in January 2017.
“Why can’t the SSS give these levels of monthly pension? Again, I will have to remind you that the amount of our retirement pension is based upon, among other factors, the length of time and the declared monthly salary credit that the employee has made throughout his or her active working life,” Dooc said.
“Having higher contributions will definitely bring up the pension amounts. Unfortunately, setting the optimum SSS contribution levels is out of our hands and often becomes a political issue. We share the move to grant meaningful benefits to our members but we should provide the funding mechanism to support it without impairing the viability of the fund.” he added.