SSS clarifies higher contribution move in January still under study

The Social Security Commission (SSC) clarified yesterday that the pension fund is still studying the possible implementation and effects of a monthly contribution rate increase beginning January next year.

In a statement, Amado D. Valdez, Social SSC chairman said the contribution increase will be their last option to secure the fund life of the Social Security System (SSS) and for the benefit of current and future members and pensioners

“We would like to assure the public that the contribution rate increase will be at the minimum amount only. We are trying our best to find ways to generate income for the pension fund," Valdez said.

The SSS official said that under the current administration, based on the latest data, collection from members’ contributions as of the end of first semester of 2017 increased by 9.62 percent to R78.64 billion.

SSS investment income also increased by 12.27 percent during the same period from R16.09 billion to R18.35 billion.

"We are looking at various income-generating schemes including disposal of sub-optimal properties to maximize revenues from these real estate properties," Valdez said.

Talks on SSS contribution rate increase happened in the wake of ongoing Senate hearings on the SS Reform Act of 2017.

Senator Richard Gordon, author of the bill, said the SS Charter Amendment will be a landmark bill which he will push for passage by end of this year.

"We strongly support Sen. Gordon's mantra that we should work, save, and invest to prosper. Right now, SSS is the best and affordable savings mechanism for our workers," Valdez said.

Based on the latest pension simulation by the SSS Actuarial and Risk Management Group, a member with an actual monthly salary of R30,000 at the time of his retirement with 45 credited years of service will have a basic monthly pension of R15,700, or only 52 percent of his last salary under the current R16,000 monthly salary credit (MSC) ceiling.

If the MSC ceiling will be adjusted to R30,000 by 2022, his estimated monthly pension will be at R29,300 or about 98 percent of his last salary at retirement.

The proposed bill to amend the 20-year-old SSS Charter is currently being deliberated at the committee level in the Senate and was listed as a priority bill of the LegislativeExecutive Development Advisory Council (LEDAC) Executive Committee.

SSS eyes the charter amendment proposal as one of the longterm solutions that will make the pension fund viable and sustainable to further serve its future members and pensioners.

One of the major provisions of the proposal is the rationalization of the powers, duties and accountabilities of the Social Security Commission (SSC).

With the rationalized powers, it will make it easier for the SSC to diversify SSS investments to generate and boost earnings of the pension fund, and to further improve the benefits being disbursed to its members.

The bill, when enacted into law, will also allow the Commission to condone penalties on delinquent contributions by employers and employee-members, and to determine appropriate monthly salary credit and contribution tables based on actuarial studies for the stability and viability of the pension fund.