This blog does not claim to be always right. The blogger has no pretensions about being morally, politically, or ideologically correct. This blog contains random thoughts, rants, raves, hysterical protestations and sporadic thinking aloud by a person who is not out to please anyone or pander to anyone's idea of what is acceptable or ideal. Feel free to disagree, it is a free country.
Wednesday, October 13, 2010
SSS delinquency list
This was my column on the date indicated above.
I am writing this column in Cebu City while in the thick of preparations for a conference dubbed as the biggest human resource event of the year: The 47th annual conference of the People Management Association of the Philippines. The conference opens at 2 p.m. today at the Cebu International Convention Center.
There are close to 1,500 human resource management professionals attending the conference and let me share with you in this column the hottest topic of conversation in every nook and cranny of the convention: The supposed alarming state of the Social Security System.
We are all aware of the problems of the SSS. One of its former Presidents, Corazon de la Paz did sound the alarm almost a decade ago. If I remember correctly, de la Paz warned that unless some drastic measures were put in place, the agency would stop being viable in a number of years. Since the warning was not repeated and the alarm bells were not rung after that, people presumed that the problems got fixed. Former SSS President Romulo Neri did say around the same time last year something about the need to increase premiums of SSS members, particularly among those in higher income brackets.
But the general impression people had was that SSS members could still continue to sleep soundly at night and not worry about the fact that they wouldn’t have retirement benefits to count on in their old age. People still want to believe that this is the case.
And now there is this persistent talk that things at the SSS are not as okay as presumed.
Fueling the wild speculations was the recent move to blacklist thousands of companies from the agency’s salary loan program. Quite a number of HR professionals attending the PMAP conference all shared the same concern: Their companies have been unilaterally and arbitrarily declared “delinquent” by the SSS.
Obviously quite a number of companies are seething, particularly those who put premium on being “honorable.” There are quite a number of companies who aspire to be known for being ideal corporate citizens and being called delinquent or being in a blacklist is something that riles them. But the smear that such a negative appellation creates on a company’s image is the least of the concerns for now. The main problem is that it comes with a harsh consequence that is arbitrary and potentially illegal: No SSS member from the same company would be able to take out salary loans or other benefits from the SSS while the company continues to be placed on delinquent status. Ouch, indeed.
As far as I know, the SSS, of course, has so far not formalized (in writing) the reasons why it has stopped processing salary loans of members who are currently employed in companies that are in the SSS blacklist. They have merely asked that companies get a copy of their “statements of accounts” in SSS branches to get a list of employees with past-due salary loans. But no circular, no memoranda to companies have been issued and for obvious reasons. The basis for the unilateral and arbitrary decision to withhold benefits to members is legally questionable.
In fact, the personnel at SSS branches are at a loss as to how to explain the fact that they cannot process benefits of members of companies who are in the delinquent list.
Just to set the record straight, the companies who have been put in the delinquent list are not companies who have been remiss in remitting SSS contributions or payments of SSS salary loans of their employees. Rather, these are companies who, as far as SSS records are concerned, have employees who still have outstanding balances in their salary loans regardless of whether they are still with the company or not anymore.
What is weird about the whole setup is that even the SSS itself recognizes that it’s an unfair imposition. SSS officials acknowledge that it is very likely that most of the employees who have outstanding balances in their salary loans must have moved to other companies, or have left for abroad, or are currently jobless. The problem is that SSS is penalizing everyone else and depriving them of their rightful benefits just because of kinks in the system.
What the SSS is in fact doing is that is forcing employers against their will to become collection agents of bad debts or to help the agency fix its records.
To be fair to the SSS, it has offered a remedy. To be removed from the delinquent list, companies are being required to submit affidavits certifying that the list of employees with past-due loans have already been separated from the company along with other documents such as resignation letters, etc. This is however, a tall order for companies with high turnover rates or those with thousands of employees. I have met HR managers here in Cebu with a list of 3,000 former employees with SSS past-due loans going all the way back to ten years. How in the world would they able to comply with the paperwork required?
Of course we should all pitch in and help the SSS in whatever way we can. We are told that bad debts from unpaid salary loans have ballooned to P27.51 billion in the last few years. This is a gigantic amount of money particularly for an agency that is going through financial problems. SSS President and Chief Executive Officer Emilio de Quiros Jr. has said that the agency is prioritizing the implementation of policies related to salary loans to be able to collect around P19 billion in past-due loans within the next three years.
It’s a good move. SSS does seem ill-equipped to monitor loan availments of its various loans programs and seem particularly even more inept in collecting past-due loans. The paradigm that everyone seems to have is that SSS has a bottomless reservoir of resources. Unfortunately, this is not the case as we are all painfully aware of now.
The problems at SSS can really be traced to lack of foresight and strategic thinking skills of our leaders, particularly those who sat at the helm of the SSS for many years. It is very clear that despite advances in automation and management information systems technology, SSS has not really kept up with the times. At the same time, the agency clearly needs to improve its processes to make sure that services to the general membership are not hampered because of inability to isolate problem cases.