Workers Recommend Major Reforms and Stepped-up Collection Efforts Rather than Increase in Contributions
The ongoing dispute between SSS Commissioner Jose Gabriel La Viña and four SSS officers raises alarm bells of the worker’s Fund being milked and used with all the talk about insider use of SSS information in stock market placement for personal enrichment. It also raises doubts about the maintenance of the integrity of the Fund. The TUCP is even now worried that the intramurals among SSS high officials might be compromising the Fund.
“SSS is now facing a crisis of credibility which they urgently must resolve in a transparent manner. We nonetheless advise against a heedless rush to judgment until all the facts come out. Workers are rightly alarmed with what is going on in the SSS. It is their future that is at stake. I will file a resolution at the House of Representatives to start a full congressional inquiry to look into all aspects of operations of the Fund in order to protect the interest of SSS members”, TUCP President and TUCP Partylist Rep. Raymond Democrito Mendoza said.
The TUCP asserts that there is an immediate need to assure the 34.6 million workers who are members of the SSS that their funds are not only intact but more importantly that the workers money is not in the hands of crooks. “There is a need to ensure that the procedures in the SSS work; that shortcuts are not being taken; and that the SSS is doing all due diligence. The SSS is not the private piggy bank of anyone in top management. Nor should privileged information obtained in favor of SSS be utilized for private commercial gain by its top officials. There is a need for a full, fair, comprehensive, and independent investigation to get a clear picture of the controversy” explained Rep. Mendoza.
“TUCP urges the SSS to exercise caution on their proposal to raise members contribution rates. After all, a heroic effort to go after employers guilty of non-remitting may already address the financing required to maintain the life of the fund,” declared Rep. Mendoza.
TUCP in a meeting with top SSS management prior to the controversy involving the administrative case filed by Commissioner La Viña against four high-ranking SSS officers, already advised SSS officials to first strengthen their collection mechanisms and go after errant employers rather than raising the contribution of workers.
The current SSS contribution rate is pegged at 11% (7.37% employer share, 3.63% employee share). All workers in the private sector who received at least 1,000 pesos (minimum salary credit) up to 16,000 pesos monthly salary (maximum salary credit ) are covered by the SSS with P110 and P1,760 monthly contributions, respectively. SSS proposed to increase the monthly contribution rate to 12.5% and to increase the maximum monthly salary credit to 20,000 pesos. The GSIS contribution rate on the other hand is set at 21% based on actual monthly salary. SSS also claims lower operating expenses than GSIS.
Contrary to SSS assertions that they are running after non-compliant companies, TUCP believes it is the prevailing corporate culture within SSS not to be pro-active in filing cases against erring employers. “How much is the total collected amount as a result of cases filed, how much based on levy? How are they proactively going after non-remittances? Do they look into company’s records of remittances or they just wait for complaint?” asked TUCP Vice President Luis Corral.
TUCP countered justifications for the proposed increase including the implementation of real time posting of payments so that banks will not play with workers moneys and pre-approved loans based on real time posting of remittances. SSS is also planning to roll-out premembership registration of 16 year olds and above and compulsory membership of OFWs to increase its membership base. Finally, SSS is also thinking to provide unemployment insurance for its members in need that will be good for 6 months.
TUCP argues that it is not the banks which is a major problem. “The real problem is the non-remittance by employers of workers money collected from their workers. Now, if the SSS is not pro-active in collecting and in not prosecuting these employers for estafa, then there is double injury for our workers. SSS must do house-cleaning and increase collection efficiency first. This is preferable to increasing contributions of SSS workers” Corral reiterated.
TUCP criticized the SSS about their inaction in making sure that all employers are remitting their contributions such as skin care clinics and health spas, many of which are not complying with SSS rules but still they continue to operate. In the case of security agencies, all the SSS should do is to get the list of all security agencies from the PNP-SOSIA and do cross-checking if all those agencies listed are religiously paying their right contributions on time.
“They just have to work first! Increase in contribution should only be resorted to if despite all efforts, the fund will not be enough to sustain its operations and meet its future obligations”, Corral added.
TUCP downplayed the argument of SSS that the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) exempting taxpayers from Personal Income Tax (PIT) for those earning 250,000 pesos annuallyand below will create additional savings for workers which will make it affordable for workers to to make additional contributions to SSS. On the contrary, TUCP pointed out that these savings will actually be paid by the workers to the excise tax and VAT which TRAIN will also pass.
“SSS is peddling the line that huge numbers of workers are going to benefit from TRAIN tax exemptions and therefore opposition to increasing SSS contribution rates is misplaced. The SSS position is misleading. First, under the proposed TRAIN, income tax is replaced with taxes on goods and services which affect all of us, no exemption. Second, the current 2 million minimum wage earners are already exempted from paying income tax under RA 9504, so nothing new for them under TRAIN except that they will now be taxed for everything they used and consumed. It should not be used as justification for an easy and lazy way to ensure the viability of the SSS fund. Current NCR minimum is just P512/day. Imposing additional contribution to cover the 12.5% increase on them would make life doubly difficult for them given the increasing prices of everything produced with fuel which will be slapped with additional excise taxes under the TRAIN”, Corral explained.
TUCP also cautioned SSS on how it handles existing assets. The SSS indicated that they are looking into joint venture agreements to finance and construct buildings on SSS properties to ensure recurring revenues. The said properties are the 5- hectare lot in front of SSS headquarters along East Avenue in Quezon City; the 3,000 square meters lot in Bonifacio Global City in Taguig City; and the 44,000 square meters property in East Triangle, Makati City. TUCP notes that the SSS does not have expertise in real estate development. #
For inquiries please contact:
Vicente C. Camilon Jr.
TUCP Assistant General Secretary and Spokesperson