A Lesson from the Vetoed SSS Pension Increase Bill

Last year, the Senate approved the bill granting an extra P2,000 monthly to SSS pensioners. This was in response to the two million Filipinos who receive a meager amount of P1,200-P4,000 monthly pension which is not enough to pay for medicines due to illnesses that come with old age and other needs. There were some speculations though that the approval was linked to the 2016 elections. Nevertheless, retirees and pensioners were hopeful that the increase will happen.

However, the pensioners’ mood soured when Pnoy vetoed the bill this Thursday, 14th January. Apparently, Pnoy said that the increase will significantly decrease SSS’ income that will result to negative funds and undue closure by year 2029.

Here’s an excerpt of the president’s message:

“…the proposed pension increase of P2,000 per retiree, multiplied by the present number of more than two million pensioners, will result in a total payout of P56 billion annually. Compared against annual investment income of P30 billion-P40 billion, such total payment for pensioners will yield a deficit of P16 billion-P26 billion annually..In view of these considerations, I am constrained to veto” (House Bill No. 5842).

Source: http://www.interaksyon.com/article/122711/pnoy-vetoes-p2000-hike-in-sss-pensions

With the turn of events, what can we learn from Pnoy’s decision?

If we think about it, retirement should be a time to enjoy the fruits from years of our labor. But it seems that if we rely on our government for our retirement needs, there is no guarantee that we will be assured of our future. Even if we receive the highest monthly pension limit of P13,000, it will still not be enough to sustain the increasing cost of living especially during our retirement years.

So, what do we do now while we have the ability to earn?  

The best step to take is to look for different instruments that will fund our retirement. SSS pension is there to assist our future financial needs but it should not be the main source of our retirement fund.

We may look at different options out there by learning how savings, insurance, mutual funds, UITFs, stocks, bonds and other financial vehicles can help in reaching our goals.

It sure is better to save and invest early. I have a disclaimer though, make sure that we entrust our money in reliable institutions. Because in the end, it may already be too late and we may end up regretting not taking any action to secure our retirement needs. Don’t you agree?