SSS nixes calls to suspend contribution hike
Metro Manila, Philippines - The Social Security System (SSS) has thumbed down a proposal to suspend the contribution hike this year starting Jan. 1, insisting that such postponement would do more harm than good to the state-run pension fund’s members.
SSS members currently see their take-home pay slashed by 14% of their monthly salary as premium contributions to build their nest egg upon retirement. But the SSS wants to bump up that share by another percentage point to 15% of their monthly compensation in accordance with Republic Act 11199 or the Social Security Act of 2018.
In a press briefing, SSS President and CEO Robert Joseph De Claro said that this will be the last round in a series of hikes in premium contribution.
“So, ‘pag idi-delay ho natin itong increase na ‘to, hindi lang ho magsa-suffer ang mga miyembro, wala silang opportunity but also iyong capacity ho ng SSS na tumulong in times of need,” said De Claro.
[So, if we delay this increase, not only will the members suffer, they won't have the opportunity, but also the capacity of SSS to help in times of need will be affected]
The contribution hike is accompanied also by increases in the minimum Monthly Salary Credit (MSC) to ₱5,000.00 from the previous ₱4,000.00 and in the maximum MSC to ₱35,000.00 from the previous ₱30,000.00.
The MSC refers to the base for calculating contributions and benefits for SSS.
“So, sa 190 pesos ho na idadagdag ninyo ho sa contribution ninyo on a monthly basis, ‘pag nag-retire ho kayo and alam naman ho natin na with 120 contributions, you are eligible for pension, so ang dagdag ho noon is 400 pesos. So, kung ika-calculate ninyo ho, 190 pesos in 10 years is about P22,000-something – within five years of retirement, nabawi ninyo na ho iyong 190 pesos na iyon. Ang life expectancy ho ng mga Pilipino ay nasa mga 72 years. So ibig sabihin, from age 66 until 72, ano na ho iyon, tubong lugaw na,” said De Claro.
[Translation: So, with the additional 190 pesos to your monthly contribution, when you retire and as we know, with 120 contributions, you become eligible for a pension, the increase will be 400 pesos. So, if you calculate it, 190 pesos in 10 years will be about P22,000-something – within five years of retirement, you'll have recovered that 190 pesos. The life expectancy of Filipinos is about 72 years. So, from age 66 until 72, that would already be net gain]
De Claro added that the fund life of SSS may also be affected should the contribution hike be suspended.
“Ang impact kasi nito is hindi—dahil minimal ang impact nito with regards to iyong tinatawag nating fund life or viability of the SSS pa, iyong short term benefit ang mawawala talaga sa mga miyembro natin in case na mangailangan sila ng tulong. And that is very important to us kasi bakit natin idi-deprive iyong miyembro na magkasakit ng additional benefit na 30 pesos,” he said.
[Translation: The impact of this is minimal—with regard to what we call the fund life or viability of the SSS—the real loss will be the short-term benefits that our members would lose if they need assistance. And that is very important to us because why would we deprive members, especially those who get sick, of an additional 30 pesos in benefits]
The SSS top official said the contribution rate and MSC increases will mean an additional collection of about ₱51.5 billion in 2025, 35% of which or ₱18.3-B goes directly to the Mandatory Provident Fund (MPF) accounts of SSS members.
De Claro said President Bongbong Marcos has yet to discuss the contribution hike, but he had already made the case for full implementation of the hike before the Department of Finance.
