MEMBERS OF the Social Security System (SSS) will have to pay more for their monthly contributions after President Rodrigo R. Duterte enacted the bill amending its charter.
Executive Secretary Salvador C. Medialdea said on Friday that Mr. Duterte has signed into law the Social Security Act of 2018, which seeks to improve the fund life of the pension fund.
The new law allows the Social Security Commission — the policy-making body of the SSS — to increase the contribution rate without the approval of the President.
Under the law, the contribution rate will be increased by a percentage point every other year starting 2019 at 12%, until 15% by 2025, from the current 11%. It also gradually raises the minimum and maximum monthly salary credits (MSC) — the basis for the contribution payments — every other year starting 2019 at P2,000 and P20,000, respectively, until P5,000 and P35,000 by 2025, from P1,000 and P16,000 currently.
Starting this year, 8% of the 12% will be shouldered by the employer, and 4% by the employee, from the current 7.37%-3.63% split. By 2025, the sharing scheme will be 10% for the employer and 5% for the employee.
Moreover, the bill also introduces an Unemployment Insurance or Involuntary Separation Benefits, which will be available to SSS members not over 60 years old who are involuntarily separated from employment. These members shall be paid benefits in monthly cash payments equivalent to 50% of the monthly salary credit for two months at most.
It will also include the compulsory coverage of overseas Filipino workers with social security protection.
In a Dec. 13 interview, Mr. Dooc said the amended charter would “extend the pension fund’s life by six years” form 2032 to 2038.
“[T]o maintain the viability of the fund, corrective measures such as the increase in contribution rate as well as increasing the minimum and maximum MSCs, are necessary,” he told BusinessWorld in an e-mail.
Mr. Dooc explained that the additional monthly pension increase approved by Mr. Duterte depleted the social security fund, which is projected to last until 2032.
In an interview with DZMM yesterday, Mr. Dooc said SSS needs to prolong its fund life by an additional 26-30 years first before providing the extra P1,000 increase in monthly pension.
“Kung magbibigay po tayo ng karagdagan na P1,000…babagsak pong muli ang ating fund life. Sana maka-recover muna…mapalakas ang fund life ng SSS bago tayo magpatupad ng karagdagang benepisyo (If we are going to give the additional P1,000 in monthly pension, our fund life will once again decrease. The fund life must be strengthened again before implementing the additional benefits),” Mr. Dooc said yesterday.
Mr. Duterte approved last January 2017 the additional P2,000 monthly pension increase for SSS members, with the first half given since March 2017.
SSS did not reply to a request for further comments as of press time.
Meanwhile, a labor group said it will not object to the planned increase in SSS monthly premium to 12% as part of the new measure.
“The SSS this time has been doing fairly with its job to improve the system’s fund aside from increasing monthly premium,” Trade Union Congress of the Philippines (TUCP) President Raymond Mendoza said in an e-mail.
“We are also monitoring the SSS for its consistent efforts to go after employers who are not paying remittances to SSS and the management’s efforts to ensure SSS investments are creating dividends.”
Mr. Mendoza added that the TUCP is “looking forward” to the implementation of the new law, which would help improve the vast range of services it provides. — K.A.N. Vidal