The Social Security System (SSS) said the scheduled increase in the monthly contribution of members starting next year will ensure the long-term viability of the pension fund and increase the benefits to be enjoyed by them and their beneficiaries.
In a statement released by the Department of Finance (DOF), it said that higher monthly contribution rate of the SSS aims to offset the financial impact of the P1,000 increase in the monthly pension of all member-pensioners that was implemented in 2017.
Beginning in January 2021, SSS monthly contribution rate will increase by one percentage point to 13 percent from the current 12 percent of their respective salaries, but not to exceed the prescribed maximum monthly salary credit (MSC).
This latest continuation hike is accordance with the Social Security Act (SSA) of 2018, also known as Republic Act (RA) No. 11199.
Finance Secretary and SSS Chairman Carlos G. Dominguez III said he hopes that their members would see the higher monthly contributions as savings and safety net against the future hazards of sickness, maternity, disability, unemployment, old age, death, among others.
Dominguez pointed out that the restructuring of the SSS contribution rate, along with the minimum and maximum MSCs and the other provisions of RA No. 11199, will "ensure the long-term viability of the SSS Fund, expand its coverage and provide more and higher benefits.”
The MSC is the determining factor for contributions and benefits, which is based on the member’s monthly earnings.
“Upon full implementation in 2025, the reforms under the SSA of 2018 will offset the adverse financial impact of the P1,000 pension increase granted in 2017,” Dominguez said.
Through the SSA of 2018, the SSS last year introduced the Unemployment Benefit for members involuntarily separated from their jobs, and extended the MSC cap for the computation of benefits to P20,000.
The upgrade in the MSC cap, meanwhile, increased the amount of benefits that members and/or their beneficiaries are entitled to receive, such as sickness, maternity, unemployment, retirement, disability, death, and funeral.
“Any drop in collections may lead to cash flow and liquidity issues. This could endanger the SSS’ ability to provide its members and their beneficiaries with benefits and loan privileges,” Dominguez said.
However, he assured the public that "the SSS’ investments are well-managed and has allowed the pension fund to respond to the needs of members despite the drop in collections during the pandemic.”