THE SOCIAL SECURITY System (SSS) is set to raise contribution rates starting next quarter after its amended charter was signed by President Rodrigo R. Duterte.
Members of the state pension fund will have to pay more for their monthly contributions starting next quarter as it adjusts the contribution rate to 12\% from the current 11\%.
The minimum and maximum monthly salary credits will also be increased to P2,000 and P20,000, respectively.
Starting April, 8\% of the 12\% rate will be shouldered by the employer and 4\% by the employee, from the current 7.37\%-3.63\% split.
“We all want a comfortable retirement and to do that, those who are in their productive years must work hard to save more,” SSS officer-in-charge Aurora C. Ignacio was quoted as saying in the statement.
For an employee who earns a monthly salary of P10,000, his personal share will increase by P36.70 to P400, while his employer’s share will go up by P63.30 to P800.
The change in the contribution schedule is the first in the series of adjustments to be implemented every other year until 2025, when the contribution rate will be at 15\%.
By 2025, the sharing scheme will be 10\% for the employer and 5\% for the employee.
Signed by Mr. Duterte last Feb. 7, Republic Act No. 11199 or the Social Security Act of 2018 allows the Social Security Commission or the policy-making body of the pension fund to adjust contribution rates and monthly salary credits of its members without the president’s approval.
This was pushed by the pension fund to ensure the long-term viability of its fund life to 2045 from the current 2032.
“We hope that our members will understand the importance of adjusting contributions to make sure that the pension fund remain strong and viable for the current and forthcoming generations,” Ms. Ignacio added.
The SSS is expected to generate an additional P31 billion as it imposes the implementation of a gradual increase of monthly contributions as allowed by the law. — Karl Angelo N. Vidal