THE SENATE on Monday passed on third and final reading the bill seeking to rationalize and expand the powers of the Social Security Commission (SSC), the governing board of the Social Security System (SSS).
Senate Bill No. 1753 repeals Republic Act No. 8282 or the Social Security Act of 1997 and seeks to give the SSC the authority to set salary credit schedules and to increase contributions without approval from the President in a bid to help the pension fund ensure its long-term viability.
It was approved with 20 affirmative votes, zero negative and no abstention. It was sponsored by Senator Richard J. Gordon, chair of the Senate committee on government corporations and public enterprises.
The bill, which will be called the Social Security Act of 2018 once signed, was authored by Senate President Pro Tempore Ralph G. Recto, Senate President Vicente C. Sotto III, Senate Majority Leader Juan Miguel F. Zubiri, as well as Senators Joel J. Villanueva, Antonio F. Trillanes IV, Cynthia A. Villar, Joseph Victor G. Ejercito, Nancy S. Binay, Loren B. Legarda, Francis G. Escudero, Grace S. Poe-Llamanzares, and Sherwin T. Gatchalian.
The measure provides as schedule of increases in members’ contribution rates, as well as the minimum and maximum monthly salary credits, to be implemented from 2019 to 2025.
In line with the SSS’ proposal of a gradual increase in the contribution rate to boost its coffers, the bill sets a hike of one percentage point (ppt) every two years, starting from 12% (split at 8% from the employer and 4% from the employee) in 2019 until 15% (10% from the employer, 5% from the employee) in 2025.
As for the monthly salary credit, the minimum will be at P2,000 and the maximum at P20,000 in 2019-2020. The minimum amount is scheduled to go up by P1,000 every two years until it reaches P5,000 by 2025. Meanwhile, the maximum will be hiked by P5,000 every two years until it hits P35,000 in 2025.
The SSS previously intended to raise its contribution rate by 1.5 ppt annually until it reaches 17%. It sought to adjust the rate by three percentage points to cover the years of 2017 and 2018, with the increase meant to fund a previously approved hike in monthly pensions and a proposal for extended maternity leave, which will have the fund shelling out more benefits.
Currently, the contribution rate of the state-run pension fund is at 11% of the monthly salary credit, 7.37% being shouldered by the employer and 3.63% by the employee.
The bill also gives the SSC authority to condone, enter into a compromise or release, in whole or in part, penalties imposed to delinquent social security contributions. It also mandates the agency to submit to the office of the President and to Congress an annual report on the exercise of its powers.
Meanwhile, the SSS now has the power to adopt or approve the annual and supplemental budget of receipts and expenditures including salaries and allowances of the SSS personnel and to authorize such capital and operating expenditures and disbursements of the SSS as may be necessary and proper for the effective management and operation of the SSS.
The measure also requires the SSS to invest at least 15% of its reserve funds in government securities.
Meanwhile, the bill also introduces a new benefit called the 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.
Its counterpart measure in the House of Representatives was approved on third and final reading last Jan. 16, 2017. It has been identified by the Legislative Executive Development Advisory Council as among the priority measures of Congress. — C.A. Aguinaldo