Amid calls to defer the increase in contribution rate of the Social Security System (SSS) this month, the state-run pension fund reiterated that such increase is vital in ensuring the continuous delivery of social security protection to its members and their beneficiaries.
“We understand the plight of our covered employers and members, but, at the same time, it is our duty to secure the long-term viability of the SSS fund entrusted to us for the continuous delivery of SSS benefits to our current and future members, as well as their beneficiaries,” SSS President and CEO Aurora Ignacio said on Tuesday.
The SSS increased its monthly contribution rate to 13 percent from the previous 12 percent under Republic Act No. 11199 or the Social Security Act of 2018
It also adjusted its minimum monthly salary credit (MSC) from P3,000 to P2,000, except for kasambahay (household help) and OFW members whose minimum MSC will remain at P1,000 and P8,000, as well as the maximum MSC from P20,000 to P25,000.
Ignacio said these reforms were designed to protect the fund life of the SSS and will also allow members to save more for their retirement.
“The SSS remains the cheapest pension and most accessible pension scheme in the country that offers seven kinds of benefit programs and various loan privileges,” she added.
While the pension fund is bound by law to implement the contribution reforms, Ignacio assured that they will heed orders from the Palace in case there would be an order to delay the implementation of these increases.
“Marami po kaming nakaplano na ibigay na benefits ngayong taon pati na rin ang projected contributions, pero kung iyan ay i-mandato sa amin ng Palasyo, kami po ay susunod,” the SSS chief said during a virtual Laging Handa briefing.
(There are many benefits that we have been planning to provide for this year, as well as the projected contributions, but if that will be mandated by the Palace, we will follow.)
But Ignacio emphasized that any delay in implementing the said reforms could “endanger the fund life of the SSS and its ability to provide its members and their beneficiaries with benefits and loan privileges, especially in this time of the pandemic.”
Based on the data provided by the pension fund, the SSS disbursed a total of P159.47 billion in social security and employees’ compensation benefits to 3.56 million members and beneficiaries from January to October 2020.
Meanwhile, SSS member loan releases from January to November 2020 totaled P58.03 billion for 3.20 million members, while pension loan releases for the said period reached P3.17 billion combined for 69,813 retiree-pensioners.
On the other hand, SSS contribution collections from January to October 2020 totaled only P169.73 billion, or a decrease of 5.4 percent from the P179.34 billion collected in the same period in 2019.
Despite the drop in collections during the COVID-19 pandemic, the SSS that its investments were well-managed and that the pension fund responds effectively to its members’ needs.
Upon full implementation of the reforms in 2025, SSS said it will also 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.