THE CONTRIBUTION RATE increase of the Social Security System (SSS) is expected to be implemented within the first half of the year once the implementing rules and regulations (IRR) of the pension fund’s newly amended charter are finalized.
During a public forum at its headquarters in Quezon City on Monday, the SSS clarified that the Republic Act No. 11199 or the Social Security Act of 2018 will take effect today, but still needs the approved and published IRR for its implementation.
Based on the new law, the Social Security Commission (SSC) or the policy-making body of the SSS is given until June 3 or 90 days after effectivity of the law to come out with an IRR.
“I hope it (the contribution rate hike) will be (implemented) within the first half of the year. Maybe April or May,” SSS President and Chief Executive Officer Emmanuel F. Dooc told reporters on the sidelines of the public forum.
He added that the contribution rate hike will require further discussions during the meeting of the Social Security Commission (SSC) on March 14.
President Rodrigo R. Duterte signed RA 11199 last Feb. 7.
The new law allows the SSC 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%.
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.
It also gradually raises the minimum and maximum monthly salary credits (MSC) — the basis for 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.
The newly-signed measure also introduces involuntary separation benefits as well as compulsory coverage of overseas Filipino workers with social security protection.
Mr. Dooc said the pension fund already has a working draft of rules for “practically all” of the law’s provisions, although some segments will require special IRRs.
“For instance, the condonation and the unemployment benefit because there are other government agencies that are involved…. There are still other provisions,” the SSS chief said.
Before the release of the implementing rules, the SSS also needs to conduct a public hearing and get the approval of the SSC.
“Once we have published it, probably we’ll wait for 15 days and then we can implement it,” Mr. Dooc added. — K.A.N. Vidal