THE COUNTRY’S Budget chief said it is high time to raise the contribution rates of Social Security System (SSS) members as they could easily adjust on the back of the additional take-home pay from the tax reform program.
“This is the best time to raise it because yung (the) additional take home pay, kayang-kaya na magbayad ng (they can easily pay the) contribution,” Budget Secretary Benjamin E. Diokno told reporters on the sidelines of the Global Infrastructure forum yesterday.
He was referring to the lower personal income tax rates provided by Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) law, which became effective Jan. 1 this year.
“They have to raise, otherwise yung (the) life ng (of the) fund will be…(affected),” Mr. Diokno added.
However, the official said either the SSS or the President would still have the final say on whether the government will proceed with the said contribution hike.
Mr. Diokno, along with Finance Secretary Carlos G. Dominguez III and Socioeconomic Planning Secretary Ernesto M. Pernia, told President Rodrigo R. Duterte in a joint memorandum dated Dec. 15, 2016 to increase member contributions to 17% from the current 11%.
They said that without a corresponding contribution increase, the approved SSS pension hike would cut the fund’s actuarial life by 14 to 17 years.
Malacañang said in January last year that following the implementation of the first tranche of the P2,000 across-the-board pension hike approved by President Rodrigo R. Duterte, a contribution hike was due for May that year as it was an attached condition to the higher pension payout.
A second P1,000 increase is expected by 2019.
Mr. Duterte must issue an Executive Order to the SSS before the pension fund can raise the rates. However, no order has been signed to this day.
SSS President and Chief Executive Officer Emmanuel F. Dooc earlier said that although the pension fund is keen on a contribution hike, they still have to wait for Congress’ amendment of the SSS Charter before they could unilaterally increase the contribution rates.
The House of Representatives already approved House Bill 2158, which amends Republic Act 1161 or the Social Security Act, on final reading last year. However, its counterpart, Senate Bill No. 1198, has yet to emerge from the committee of government corporations and public enterprises.
Aside from raising contribution rates, SSS said it also seeks to raise the maximum salary credit to P20,000 in the first year in implementation from the current P16,000. This will then be hiked to P25,000 in the succeeding year, before reaching P30,000. — E.J.C. Tubayan