The Social Security System (SSS) has appealed to Congress not to defer the implementation of the contribution rate hike scheduled for this year as the pension fund’s financial viability may be adversely affected by its postponement.
SSS President and CEO Aurora Ignacio urged legislators during the hearing of the House Committee on Government Enterprises and Privatization on Thursday to consider the effects of delaying the contribution hike to benefits given to members, pensioners, and their beneficiaries.
Ignacio explained that provisions of the proposed legislation in House bills 8304, 8310, 8313, 8315, and 8317 will weaken and put more strain on the SSS fund in these difficult times.
“At the outset, we have expressed our opposition to these proposals because of (their) adverse financial impact to the financial health of the SSS and (these would) jeopardize the benefits of members, pensioners and their beneficiaries,” Ignacio said.
“However, we support any measures that will benefit our stakeholders as long as it will prioritize the long-term sustainability of the pension fund,” she added.
The SSS chief also emphasized that the additional contributions will be based on the members’ minimum salary credit category and are just “minimal” but its impact on the fund life will “benefit current members and future generations.”
“Every additional peso they will contribute can help strengthen our financial viability and allow us to fulfill our obligations to our members and pensioners in the decades to come,” Ignacio said.
According to Ignacio, the monthly rate will range between P15 and P100 for employed members; P30 to P200 for self-employed and voluntary members; while P80 to P200 for OFW members.
Ignacio also explained that postponing the scheduled contribution hike will decrease the number of benefits and loans that may be given to millions of SSS members.
“We estimated a projected loss amounting to P41.37 billion for 2021 alone. And this amount will also continue to increase annually, cutting short the SSS fund life and adding to the contingent liability of the pension fund which is already estimated in the trillions of pesos,” she bared.
“We understand that we are currently in a pandemic situation, but we are appealing to lawmakers to look into the significance and long-term impact of adjusting the SSS contributions for its 38.8 million current members and future members as well,” Ignacio added.