Even as the battle for healthcare funds ensues as the Department of Finance (DoF) siphons off P89.9 billion from the Philippine Health Insurance Corporation, another report comes out which is an indictment of the poor social protection in the country.

The Philippines received a grade of 46 out of 100 in the global research of American investment consulting firm Mercer, indicating the lack of state protection for elderly Filipinos compared with other nations.

The Philippines is joined by India, Argentina, South Africa and Turkey as having the least financial security for retirees, which is particularly relevant now with progressive increases in the prices of services and commodities.

The Mercer CFA Institute Global Pension Index 2024 described the level of social protection in the Philippines as having “some desirable features but also has major weaknesses and omissions that need to be addressed.”

“Without these improvements, its efficacy and sustainability are in doubt,” according to the study.

It is even ironic that the Philippines has two pension funds, the Government Service Insurance System and the Social Security System, to which all those with gainful work and their employers contribute.

Poor management and occasional irregularities hound both agencies.

The national and local governments also offer token financial aid such as a one-time P100,000 grant to centenarians, which has been embroiled in controversy lately as some of the beneficiaries said they have not received the amount.

According to Mercer, the Philippines’ retirement income system comprises a small basic pension and an earnings-related social security pension.

Members can receive a lifetime pension if they have contributed for a minimum of 180 months for government and 120 months for non-government members.

Both schemes provide calibrated benefits if the minimum number of contributions is not satisfied.

The study said the Philippine system could be improved by increasing the minimum level of support for the poorest aged individuals and aligning the benefit to cost-of-living indices; improving vesting (or specified term of employment) requirements in private-sector plans; introducing non-cash-out options for retirement plan proceeds so they are preserved for retirement purposes; and improving the governance requirements for the private pension system.

The top three countries, according to the research, with the best social protection are the Netherlands (score of 84.8/100), Iceland (83.4) and Denmark (81.6).

According to the study, many countries are shifting from traditional defined benefit pension plans, where employers assume the risk, to defined contribution plans, which place financial responsibility on individuals.

“These shifts are creating economic, social, and financial strains that require changes in pension systems worldwide to ensure their efficacy,” the study noted.

In some pension systems, the choice is very broad in an ever-expanding marketplace, whereas in other systems, the options may be limited to the level of the initial pension and the rate of future indexation.

“The necessity of making such a decision places many retirees in a new context and outside their comfort zones. In short, many retirees need some help,” the Mercer study indicated.

It cited as an example the Netherlands, where under new pension legislation, administrators will be obliged to guide participants in making choices regarding their pensions.

In the United Kingdom, current arrangements require pension schemes to signpost members to the government-financed Pension Wise organization, which gives free impartial guidance but not advice, which means it cannot propose individually tailored solutions.

“In an ideal world, accessible and affordable financial advice should be available to all retirees. Unfortunately, most retirement income systems have not yet reached this point of maturity,” the study said.

The ideal situation is merely a dream for Filipino pensioners who cannot even get by with the government support they are receiving after working for practically their entire adult life or earlier.

Filipinos are still lucky though since many benefit from the care of family members which is not the case with people in other cultures.

Still, individuals relying on other persons for their existence is a deplorable fix to be in.