Hiked SSS contributions start this year

Monthly contributions of the private sector’s employees and employers will have a series of increases beginning this year following the signing of the new charter governing the staterun Social Security System (SSS).

After President Rodrigo R. Duterte signed into law the Social Security Act of 2018, it also signalled that members of the SSS will need to shell out additional contributions to the fund, or by extra one percentage point beginning this year to 12 percent from the current 11 percent.

The monthly member’s contribution, which is shared by the employee and the employer, will likewise gradually rise every other year until the rate reaches at 15 percent by 2025.

According to the SSS, the increase is necessary to improve the fund life of the pension fund which was partially depleted by the increase in pensions.

Based on the estimates, the additional contribution from members beginning 2019 will immediately raise the SSS’ actuarial life by additional six-years.

The higher contribution rate will also help the SSS to compensate for their additional expenses incurred in the granting of 11,000 across the board increase in pension benefits that was given by President Duterte in 2017.

Along with member’s contributions, the new SSS act also gradually raised the minimum and maximum monthly salary credits (MSC), or the basis for the contribution payments, currently at 11,000 and 116,000, respectively.

Under the new payment scheme, the minimum MSC starting this year will be at 12,000 while the maximum is at 120,000. These floor and ceiling rates will further increase every other year until they reach 15,000 and 135,0000 by 2025, respectively.