SC: No action yet on SSS contribution hike

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While the SC previously issued a TRO on Meralco's rate hike, it is yet to decide on what action to take on the SSS contributions hike

NO ACTION YET. The Supreme Court defers action on the prayer for TRO on the SSS premium hike. File photo by Rappler

MANILA, Philippines – Premium-paying members of the state pension fund Social Security System (SSS) have yet to experience the temporary ease in payments that subscribers of the Manila Electric Co (Meralco) currently have.

While the Supreme Court (SC) previously issued a temporary restraining order (TRO) on Meralco’s rate hike, it deferred action on the SSS contributions hike

The SC on Tuesday, January 14, instead required SSS, along with the other respondents to the petition against the SSS premium hike, to issue a response-comment. Other named respondents include President Benigno Aquino III, Executive Secretary Paquito Ochoa Jr, and SSS president and CEO Emilio de Quiros Jr.

The Palace supports the contribution rate increase, claiming that funds will not be enough for SSS pensioners by 2018 if premium payments are not raised. 

Aquino approved the hike on Sept 30, 2013, two months after he warned against the drying up of the pension fund during his State of the Nation Address.

Prayer for TRO

Labor group Kilusang Mayo Uno (KMU) appealed in a 10-page petition before the High Court for a freeze on the premium rate hike and a TRO while the Court decides on the matter.

In seeking for the TRO, the left-leaning group argued that the earnings of workers “intended for food requirement and other basic needs” would be compromised in favor of “defraying the amount needed for the SSS contributions increase.”

It also raised concerns on officials pocketing the money collected from the raise instead of being diverted to its supposed purpose – that is, prolonging the actuarial life of the pension fund.

“An increase in the SSS fund does not by itself constitute improved performance as it does not immediately translate into better benefits for members, because the SSS leadership can allocate the funds for other purposes,” the petition read.

SSS officials have been the subject of criticism late 2013, after receiving hefty bonuses from the state. Aquino defended the executive bonuses.

“The increase in SSS contributions will therefore mean an added burden to its members, especially the workers who comprised the bulk of SSS membership. This is ironic because under the 1987 Constitution, the State is supposed to protect the rights of workers and promote their welfare,” it added.

SSS premium hike

The SSS premium hike scheme was declared effective January 2014. 

Under the new scheme, SSS members will have to pay 11% of their monthly salary credit (MSC) compared to the previous 10.4%.

The MSC is the basis of a premium-payer’s total contribution. 

The maximum MSC was also increased to P16,000 from P15,000. This means that an SSS member whose MSC ranges from P16,000 and above will pay the same monthly contribution (see schedule below).

Table from sss.gov.ph

– Rappler.com

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