President Duterte has approved a P1,000 hike in the Social Security System (SSS) pension effective this January, Malacañang announced yesterday.
But along with the pension increase is a 1.5 percent increase in the contribution rate, according to presidential spokesperson Ernesto Abella.
“The President has approved a P1,000 pension hike this month,” Abella announced in a press briefing in Malacañang.
This, as the President seeks to “fulfill a social contract with the Filipino people…, while exercising fiscal responsibility to ensure the economic sustainability and protect the gains of those who have prudently invested in the nation’s future,” Abella told reporters.
The funds covering the increase, he said, will be through current contributions and investment reserved fund, as he pointed out that the President is not amenable to using taxpayers’ money to fund the pension hike because the SSS is a private pension fund.
Its total assets are P487 billion as of October 2016 and its fund life is until 2042. Even with the P1,000 increase, the fund life will continue until 2040 as the contribution rate and increase in monthly salary credit will be implemented in May 2017, he added.
“In peso value, the additional total contribution will range from P15 to P740 equally shared by employer and employee,” Abella explained.
Abella further said that to ensure sustainability, SSS is setting in place legal action plans to reduce contribution delinquency, as well as executive interventions needed to improve collection through issuance of an Executive Order (EO).
Meanwhile, SSS chairman Amado Valdez said that while the SSS pension increase takes effect this month, there might be a slight delay to around February “due to some systems requirement.”
“Kailangan ng recomputations so there might be a slight delay,” he said.
At the same time, Valdez said that another P1,000-pension hike will be implemented in 2022 or even earlier, possibly 2019.
“The first P1,000, this January. We projected the next P1,000 in 2022 but if we are able to implement and get favorable results maybe it won’t take until 2022, maybe by 2019 we can already comply with the next P1,000,” he said.
(ELENA L. ABEN)