THE Social Security System (SSS) said the net impact of expanded maternity benefits will subtract a year from its actuarial fund life, and proposed a new round of hikes in member contribution rates to fund its increased commitments.
In a news conference on Monday, the pension fund said fund life is now estimated to run to 2044 if SSS pays out expanded maternity benefits under the new law if it does not access new sources of funding.
“Without funding, if the social security fund absorbs the cost, it… will shorten our fund life by one more year, so we’re now at 2044,” SSS Senior Vice President and Chief Actuary Edgar B. Cruz said on Monday.
He added that the fund will have to disburse P13.5 billion during the first year of implementation of the expanded maternity benefits, more than double the P6 billion allotted in previous years.
Republic Act (RA) No. 11210 or the Expanded Maternity Leave (EML) Law was signed by President Rodrigo R. Duterte in February, increasing paid maternity leave to 105 days from the current 60 days.
Under the new law, qualified members will receive P70,000 worth of maternity benefits regardless of the means of the child’s delivery, from the previous P32,000 for normal delivery.
Aurora C. Ignacio, SSS officer-in-charge, said the fund is “hopeful” it will be allowed to increase contributions rates again beyond the latest round of adjustments hiking member contributions.
“What we hope for after the number of years that we will be allowed to give the one [percentage point increase] every other year is to increase to cover the maternity benefits,” Ms. Ignacio said. “We were also allowed to do actuarial evaluation every three years. For now, we will try to cover with whatever we have.”
She added that the SSS can conduct an actuarial study earlier than the scheduled one in 2021 to determine whether the pension fund should increase contributions to fund the additional benefits.
According to its estimates, the pension fund will have to increase contributions by half a percentage point to cover for the expanded maternity benefits.
“We can’t increase benefits without a corresponding increase in contributions. If we don’t the fund life will suffer,” Mr. Cruz said.
RA No. 11199 or the Social Security Act of 2018 was signed by Mr. Duterte on Feb. 7, allowing the Social Security Commission or the policy-making body of the SSS to increase the contribution rate without the approval of the president.
The contribution rate will be increased by a percentage point starting April to 12%, until it hits 15% by 2025, from the current 11%.
It also gradually raises the minimum and maximum monthly salary credits (MSC) every other year starting next month at P2,000 and P20,000, respectively, to P5,000 and P35,000 by 2025, from P1,000 and P16,000 currently.
The increased contribution rate and MSC are expected to increase the actuarial life of the SSS to 2045 from 2032.
Voltaire P. Agas, SSS senior vice president and chief legal counsel, said the implementing rules and regulations (IRR) of the EML Law are being drafted by the SSS together with the Department of Labor and Employment.
“We hope they can provide the IRR by Labor Day,” he said. — Karl Angelo N. Vidal

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