THE Social Security System (SSS) said its increase on monthly contribution rate to 13 percent from the current 12 percent will be implemented beginning January 2021.
The announcement was made by SSS President and Chief Executive Offcer Aurora Ignacio in a press briefing on Wednesday. She said the new policy on the Workers’ Investment and Saving Program (WISP) is pursuant to Republic Act 11199 or the “Social Security Act of 2018.”
In Congress, two members of the Makabayan bloc said the hike in SSS monthly contributions was untimely.
Ignacio said that the minimum monthly salary credit (MSC) would be adjusted to P3,000 from the current P2,000, except for kasambahay (house helps) and overseas Filipino workers (OFW) members whose minimum MSC will respectively remain at P1,000 and P8,000, while the maximum MSC will be at P25,000 from P20,000.
“As to the contribution share of the employer and employee, the additional 1 percent will be equally divided, thus the employer share will be at 8.5 percent from 8 percent, while the employee share will be at 4.5 percent from 4 percent. It applies to employed members, land-based OFW members in countries with bilateral labor agreements with the Philippines, and sea-based OFW members,” Ignacio said.
From 1980 to 2016, the contribution rate was increased only four times, while pensions were increased 22 times, she explained.
In 2017, a P1,000 additional monthly benefit was implemented for all pensioners without a corresponding adjustment in the contribution rate, which caused a reduction in the SSS fund life of 10 years.
In the briefing, Ignacio said that the SSS understands its pensioners’ plight and recognizes the good intention of granting the second tranche of the P1,000 additional monthly benefit. However, to grant such additional benefit allowances, the actuarial soundness of the SSS must be guaranteed through thorough studies, especially now that there is a pandemic and the collection of SSS contributions experienced a significant decline.
The state-run pension fund will also open a Worker’s Investment and Savings Program (WISP) for the portion of member contributions in excess of the P20,000 MSC up to the prescribed maximum MSC of P25,000.
The SSS said this new policy is “a safe, convenient, principal-protected, and tax-free individual retirement savings plan, which will serve to augment member savings from the regular program.”
Opposing the hike
House Deputy Minority leader and Bayan Muna Rep. Carlos Isagani Zarate likened the SSS to a “Grinch” for pushing through with the hike despite the effect of the pandemic on workers.
“The SSS does not care even though the pandemic has severely affected its members as long as they can get additional contribution,” he said in Filipino.
Bayan Muna Rep. Ferdinand Gaite also slammed SSS for not considering the dire situation of workers amid the pandemic, citing the high inflation rate and more Filipinos considered themselves as poor.
Gaite said that the contribution hike would raise the minimum monthly salary credit from P2,000 to P3,000.
“Maybe it is possible to postpone it in the meantime? At least until our workers are able to bounce back from the hardships being caused by the pandemic and the subsequent economic crunch,” he said in a mix of Filipino and English.
Contributions in WISP shall be paid together with contributions in the regular SSS program, the agency said.
WITH DIVINA NOVA JOY DELA CRUZ