SSS proposes increase in contribution

THE proposed 3% monthly contribution rate hike of the Social Security Commission this year, from 11 to 14 percent is aimed to level the difference in contribution rates of SSS and the Government Service Insurance System (GSIS).

In a statement, SSS Chairman Armando Valdez said "We are pushing for a gradual increase in the contribution rate and monthly salary credit because we want pension equity among workers in the government and in the private sector. Government retirees have higher pension because their contribution rate is at 21 percent of their actual salary as compared with those working in the private sector, whose SSS contributions are only 11 percent of their salary capped at P16,000,".

The Chairman cited as an example, that a private sector employee who earns P25,000 only contributes P1,760 based on a P16,000 maximum monthly salary credit (MSC) to SSS while a government employee who earns the same amount contributes P5,250 to GSIS.

Valdez explained "This results in a significant difference between the amount of pension being received by a private worker and a government employee. And this is what we want to address to make the pension of private workers at par with those in the government,”.

The SSS is proposing for the additional three percent to be shared equally by both the employer and employee, bringing the effective contribution rate at 8.87 percent for the employer and 5.13 percent for the employee. He added that SSS is also recommending to increase its minimum MSC from P1,000 to P4,000.

The proposal to increase the minimum MSC to P4,000 and the maximum MSC to P20,000 along with the three percent contribution rate hike will increase the minimum and maximum contributions to P560 from P110, and to P2,800 from P1,760, respectively.

The Chairman reiterated "The increase in contribution is only about P450 for those who will pay at the minimum MSC of P4,000 while those earning at least P20,000 will only add P1,040 to their monthly SSS contributions. We wish to thank in advance our employers who will share half of the increase in their employees’ SSS savings,”.

Majority of SSS members who pay at P10,000 MSC will have a corresponding increase of P300 in additional contribution under the proposed pension reform agenda.

In his press briefing with the Baguio journalists during the opening day pa-

rade of the Baguio Flower Festival, Presidential Spokesperson Atty. Herminio "Harry" Roque Jr. said "Again, the President is studying the matter because he knows the viability of the SSS is a matter of actual science and he may have to increase. The SSS have asked for an Executive Order but the President is still studying the matter."