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Manila Bulletin devider Business devider SSS projects P51.5-billion revenue boost from contribution rate hike

SSS projects P51.5-billion revenue boost from contribution rate hike

Published Jan 7, 2025 01:07 am

The Social Security System (SSS) said its contribution rate increase, effective January 2025, is projected to generate an additional P51.5 billion in revenue.

In a statement, Robert Joseph M. De Claro, SSS president and chief executive officer, said the substantial increase in revenue will bolster the pension fund, ensuring its long-term viability.

Starting Jan. 1, 2025, the SSS contribution rate rose to 15 percent from 14 percent, as mandated by Republic Act (RA) No. 11199, also known as the Social Security Act of 2018.

“With this last tranche of contribution rate and MSC [monthly salary credit] increases, the SSS fund is projected to last until 2053 – doubling the fund life to 28 years,” De Claro explained.

The actuarial valuation study conducted in 2018 indicated that SSS’s fund was projected to last only until 2032, giving it a lifespan of just 14 years.

He added that 35 percent of the additional revenue, or P18.3 billion, will go directly to the Mandatory Provident Fund (MPF) accounts of SSS members.

De Claro also said the increased revenue will allow the SSS to better support the national government, particularly in providing calamity assistance to members.

In 2024 alone, the SSS released P9.7 billion in calamity loans to over 500,000 calamity-stricken members.

The minimum Monthly Salary Credit (MSC) has been raised to P5,000 from P4,000, while the maximum MSC has been increased to P35,000 from P30,000.

These changes mark the final phase of contribution rate and MSC increases that began in 2019.

Addressing concerns about the contribution rate hike, De Claro acknowledged public sentiment but emphasized that any suspension or modification would necessitate amending the existing law.

He clarified SSS’ position as a government-owned and controlled corporation bound to implement existing legislation.

"We are tasked with implementing the law that governs our institution," De Claro stated. "If there is—because this is law, it means that the law needs to be amended for this contribution to be suspended."

De Claro also referenced the historical evolution of the SSS law, which has undergone numerous amendments since its establishment in 1957.

While the SSS explores available options, De Claro said the contribution rate increase remains in effect unless Congress amends the law.

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