State-run Social Security System (SSS) is set to implement a one-percent hike on its members’ monthly contribution starting January 2021 in a bid to ensure an increase in benefits and pension fund viability.
In a statement on Tuesday, SSS President and CEO Aurora Ignacio said the monthly contribution rate will increase to 13 percent from the current 12 percent of their respective salaries, but not to exceed the prescribed maximum monthly salary credit (MSC).
This was after Ignacio recently signed SSS Circulars No. 2020-033-b, 034-b, 035-b, 036, and 039 which stated the new contribution schedule.
“We understand the plight of our covered employers and members, but it is our duty to ensure the longevity of the SSS fund entrusted to us, to allow the continuous delivery of meaningful social security protection to our current and future members, as well as their beneficiaries,” she said.
According to Ignacio, for employed members including OFWs, the additional one percent will be divided equally between them and their employers, bringing the contribution rate breakdown to 8.5 percent for their employers and 4.5 percent for them.
“Those who will be paying under the P10,000 MSC starting next year will pay a monthly contribution of P1,300, which is P100 higher than the P1,200 in 2020,” Ignacio explained.
“The P100 additional contribution will be divided as P50 from their employers for a total employer share of P850 and P50 from them for a total member share of P450,” she added.
The SSS chief also said that the MSC will be adjusted to P3,000 from P2,000, except for kasambahay (house helps) and OFW members whose minimum MSC will remain at P1,000 and P8,000, respectively, while the maximum MSC will be raised to P25,000 from P20,000 in under the Social Security Act of 2018.
Ignacio added that the MSC to be considered for the computation of benefits under the regular social security program is capped at P20,000.
However, Ignacio emphasized that contributions with MSC over P20,000 will go to the Workers’ Investment and Savings Program (WISP), a fund that will yield additional pension income for members contributing under it.
“For example, a member will be paying under the P25,000 MSC. Based on the 13 percent contribution rate that would begin in January 2021, his/her monthly contribution will be P3,250, of which P2,600 will go to the regular social security fund, while the remaining P650 will go to the WISP,” she said.
Ignacio pointed out that these reforms under the Social Security Act of 2018 aim to ensure the long-term viability of the SSS and provide higher benefits for SSS members and their beneficiaries.
Upon full implementation in 2025, SSS said these reforms will offset the adverse financial impact of the P1,000 pension increase granted in 2017.
“We hope that members see their contributions as their safety net and savings, which they and their beneficiaries can turn to in times of sickness, maternity, unemployment, retirement, disability, death, calamity, and other contingencies, through the benefit programs and privileges the SSS offers,” Ignacio added.
