MANILA, Philippines – Members of state pension fund Social Security System (SSS) will pay higher contributions starting next year.
SSS will raise in January members’ monthly contribution rate to 11% of their monthly salary credit (MSC) from 10.4%.
At the same time, the pension fund will raise the maximum MSC to P16,000 from P15,000.
“The 0.6% increase will be divided equally between employees and employers, with the latter to pay 7.37%, while the former will pay 3.63% based on the applicable monthly salary credit. Self-employed and voluntary members will shoulder the entire 11% contribution rate,” SSS president and CEO Emilio de Quiros Jr. said in a statement.
MSC is the basis for computing the amount of members’ contributions.
Currently, the minimum MSC is P1,000 and the maximum is P15,000. A member with a monthly salary of P1,000 to P1,249.99 has an MSC of P1,000. This means his or her contribution will be 10.4% of P1,000 or P104.
A member with a monthly salary of P14,750 and more has an MSC of P15,000, and a monthly contribution of P1,560.
“The new maximum MSC at P16,000 means that a greater portion of the members’ incomes are covered in their SSS contributions,” de Quiros explained. “Higher contributions eventually mean higher benefits in the future.”
De Quiros said the increase in the contribution rate “is part of SSS reform agenda that seeks to lengthen gradually the actuarial life of the fund.”
“It also aims to reduce the unfunded liability of SSS, which was at P1.07 trillion as of December 2011 and increases by about 8% annually,” he added.
For the past 3 years, SSS has been meeting with various stakeholder groups, including employer and worker organizations, to get support for its proposed reforms.
During his State of the Nation Address in July, President Benigno Aquino III warned SSS funds will dry up by 2018 if members’ contributions are not raised.
Aquino approved the increase in the contribution rate to 11% under SSC Resolution No. 711-s.2013 dated September 30, 2013. – Rappler.com