SOCIAL SECURITY System (SSS) intends to increase its monthly contribution rate to 14% this year after failing to implement the hike last year.

“We plan to increase it (the contribution rate) by 1.5 [percentage points] from 11%, but we have lost that opportunity when the increase was not implemented last year. For practical purposes, we have to increase it by three [percentage points],” SSS President and Chief Executive Officer Emmanuel F. Dooc said in an interview.

Mr. Dooc said he will send a follow-up letter to President Rodrigo R. Duterte asking him to issue an executive order to tweak the monthly contribution rate as well as the minimum and maximum salary credit.

“I’m going to send a follow-up letter, hopefully this week, to the president and I’ll course it through the secretary of Finance so that I can get his support,” he said.

Aside from adjusting the contribution rates, SSS is also looking at increasing its minimum salary credit to P4,000 from P1,000 as well as its maximum salary credit to P20,000 from P16,000.

The state pension fund previously asked Mr. Duterte to increase its contribution rates, but was unable to do so because it had to wait for the passage of the first tax reform package.

“We feel now that the [tax reform package] will provide relief in the form of lower taxes to our members so they can now afford to pay the extra additional contributions,” Mr. Dooc said.

In January last year, Mr. Duterte approved the monthly pension increase of P2,000, which will be done in two stages. The first P1,000 was already disbursed to pensioners since March.

SSS intends to upwardly adjust its contribution rate by 1.5 percentage points on an annual basis until it reaches 17%.

Currently, the 11% contribution rate is being shouldered by the employer (7.37%) and the employee (3.63%).

Aside from the administrative order that SSS requested from the president, the pension fund could also hike its contribution rate by amending its charter through legislation.

“The amendment empowers SSS through the [Social Security] Commission to adjust the contribution rate once the amendment becomes a law,” Mr. Dooc said, adding that this would take time.

The SSS president added the contribution hike is necessary “to improve the finance of the system and enable us to meet the financial obligations including the pension benefit hike,” adding the contribution hike will prolong the pension fund’s salary life to 2045. — K.A.N. Vidal

RELATED ARTICLESMORE FROM AUTHOR