State-run Social Security System will need to shell out about 38 billion pesos in additional expenses a year to fund the proposed second tranche of a 1,000-peso pension hike, an official said.
SSS vice president for public affairs and special events Fernan Nicolas said the proposed pension hike would have huge funding requirements if implemented.
Nicolas said the need for more funds could still increase as more SSS members retire.
Given the huge requirements, the SSS official reiterated that there is a need to study the proposed pension hike to ensure that the state pension fund can truly afford to release additional benefits.
He added, “We need to study this because the system, the fund should be financially sound before we can release it.”
Nicolas warned granting the 1,000-peso pension hike without a proper study would be “dangerous” considering the fund’s current financial position, which has been affected by the coronavirus pandemic.