SSS: Kabalikat ng Bayan?

The Social Security System is a government company owned by its members. In 2013, it
was in the news because of the issue of P1 million given as Productivity Performance Bonus to
SSS executives. Emilio de Quiros, SSS president, claimed that the SSS executives and
employees deserved the bonuses because they were able to hit and even exceeded their financial
target for the year by acquiring some good investments and obtaining significant savings. De
Quiros claimed that giving the bonuses was not only legal but also moral. He further said that he
must give the amount of bonus so that the SSS could compete with private firms. In fact, the
bonuses given were far lower than what private companies were willing to give. To get the best
people for the job, the SSS must give proper incentives.
However the critics were seeing otherwise. They said that indeed it was legal because the
giving of bonuses was approved by the authorized government bodies. However, they
maintained that it was not moral due to some reasons. First, the SSS reserve fund was the still far
lower than the international standard. This means that even if de Quiros administration
performed well, it still falls short in the grand scale of things. Second, at the same time, the SSS
was about to implement a 0.6% increase on the member’s monthly premium to cover its
unfunded liabilities. For critics, it appears improper for SSS executives to get substantial bonuses
at a time when SSS members were to increase their contribution. Third, critics maintain that,
generally speaking, the SSS has been unable to provide quick, convenient and significant
services to its ordinary members. In other words, it is claimed that SSS members are not getting
the benefits and services that they deserve.

Introduction and Problem

The organization addressed in this case study is the Social Security System (SSS) in the
Philippines. The organization is a government firm that is owned by its members. The
organization's purpose is to promote social justice and provide protection in a meaningful way to
its members and beneficiaries against various hazards, such as disabilities, maternity, and death.
The organization provides social security to members via the social security program and the
Employees' Compensation (EC) program.
The problem that ought to be solved is the standoff between the critics and the Social
Security System (SSS) former president, Emilio S. De Quiros, Jr., about awarding a Productivity
Performance bonus to the organization's employees and executives amounting to ₱1 million. The
organization's former president claims that it was not only legal and moral, while the critics
consider it to be immoral.
According to the Social Security System (SSS) former president, the employees had
performed well by exceeding their financial target and hence needed to be rewarded for allowing
the company to compete with the private sector. In contrast, those who criticized the move for
awarding the bonuses claimed that it was immoral for various reasons, even if it was legal since
it is Social Security System (SSS) that authorized the bonus. For instance, the critics postulate
that the reserve funds used for giving out the bonuses were far behind the international standards.
Moreover, the other issue is that the executives and employees were awarded the bonuses at a
time when the members' contribution rates were bound to be increased for catering for the
unfunded liabilities.
As a result, the biggest problem was that the program members were not getting the
benefits and services they deserved. This case study addresses the Social Security System’s
challenge of mismanagement and ways such as that can help to reduce unfunded liability and
increase public trust.

Objectives
The purpose of the study is to establish whether it was moral for the organization's president to
award the executives and the employees Productivity Performance bonus when there were still
some unfunded liabilities within the organization even if they had met their annual financial
target (Asia, 2016). Moreover, the other aim of the study is to establish whether it is right for the
critics of the awarded bonuses to claim that the compensation's issuance was an immoral thing.
This is because both the critics and the organization president agree that the awarding of the
bonuses was a legal affair. The specific questions that I am trying to answer are the following:
 Is the issuance of the bonuses to the executives and the employees, both legal and moral,
based on the company's financial situation?
 Are the critics justified in claiming that the Productivity Performance bonus's issuance is
not moral even if it is legal?
 How can the standoff between the critics and the president of the organization be
mitigated?

Alternative Solutions

ACA 1 - Prevent anti-corruption mindset.

The business needs to develop a culture of transparency and honesty and the leaders need
to be committed to that culture in the long term. At the end of the day, leaders should be
responsible for setting expectations of conduct in the workplace. When the right expectations are
set, the workers will naturally obey. Once leaders embrace an ethical approach to doing business,
the majority of the organization will embrace that approach and corruption will be less likely to
occur.
The first thing the company should do is put the right policies in action, such as finding a
way to promote whistle-blowing for all employees. The company's internal auditing controls
should also be strict, with receipts being requested anywhere and no cash payments approved.
Workers, contractors and officers should also be qualified to take effective measures to deter
corruption and bribery.
The point is to be as transparent and efficient as possible and to be as realistic as possible
in the procedures followed by the company. In the meantime, top-level management should still
stay committed to the strategy and set an example that lower-level workers will easily obey.
The company should also be in a position to determine the risks associated with bribery.
Certain workers may be at greater risk of bribery or other types of corruption than other workers.
These workers should be qualified and equipped with procedures related to making difficult
decision making.

ACA 2 - Rewards and celebrate good financial management; resolve poor financial
management.
To attract and retain the best talent, the government would also need to reconsider its pay
and conditions policy. It will need to ensure that the incentives of senior managers represent their
financial management expertise and success in an acceptable manner. Equally important,
managers who perform poorly in this field, for example, by failing to recognize the financial
consequences of the various policy choices, should be made aware of their failings and the need
to correct their shortcomings in the future.

ACA 3 – Promote a healthy work life balance

It can be easy for them to forget sometimes that workers have personal lives that take
priority. Employees who feel their leaders value them at work build a stronger sense of loyalty.
It's not coincidental that some of the best sought-after benefits for employers contain items that
offer a great balance of work and life.
These benefits include flexible work hours, regular days off, freedom to work at home, or
benefits that help family life. But, the benefits are not all. The managers' mindset, when dealing
with the emotional dilemmas of workers, will make a difference. Although workers often value
the flexibility to work from home, this does not mean you can expect them to take home the job.
Working at home skills, instead, usually means the opportunity to work at home during a regular
day of work-at-work. Leaders should be supportive of taking days off should workers need to.
Make sure workers are comfortable asking about their benefits and other work-related problems
that they are not satisfied with. A transparent culture encourages teamwork and builds shared
respect and trust between all levels of the organization.
Employee benefits for companies are not just an option. In order to contribute to salary
offers and working conditions, benefits in kind, financial and well-being are factors which are
decisive for the career choices of employees
ACA 4 - Give pension buy-outs.
Another way to reduce unfunded liabilities is to get people to opt out of them voluntarily.
By providing upfront cash incentives, government may be able to persuade some workers to
migrate from the existing defined benefit plan, with high and unforeseeable debt costs, to more
stable defined contribution plans.

ACA 5 – Cutting the benefits.

State pension debt is an obligation to retirees and it could be tempting for some state
legislators to try to cut their debts by cutting their commitments. This might entail something to
minimize the cost-of - living increases made to pensioners or to improve the formula for existing
employees.
Although these approaches could lead to substantial cost savings and there are some
approaches that would only impact employees with several more years left in the profession, in
general, it would advise states against cutting benefits. There is a great deal of financial gain, but
there are large potential downsides in terms of political, legal and moral backlash.

ACA 6 – Issue Bonds.

State pension debt is flexible, and politicians appear to shirk their long-term pension
finance obligations in favor of other, more urgent budget priorities. That trend can led to
employees, where states are over-promised and under-saved. States may opt to commit
themselves to a more tangible payment schedule by selling pension obligation bonds. Bonds will
require states to make regular payments and potentially give the state a way to could their
obligations. After issuing bonds paying interest let say, 5%, they will invest the proceeds and
hope that they will receive a higher rate of return over the life of the bond.

ACA 7 - Restructure the debts

Rather than coping with the debt, they could only adjust the timeline that they have to
pay it off. Imagine that you have a 30-year mortgage on your home, after a couple of years, you
decide you can't make complete monthly payments, but you'll also get a 30-year loan for those
monthly payments.
This might sound mad, but some states do this automatically every year, while others
reconsider their decisions every couple of years and pledge to make their payments this time
truly and honestly.
Analysis of the Chosen Course of Action

Discussion and Recommendations