SSS’ plan to hike members’ contributions await approval

The Social Security System (SSS) is planning to implement a 3-percentage point increase in members’ monthly contributions and is now waiting for the approval of President Rodrigo Duterte.

“Target namin i-implement ‘yan this year, hopefully in April,” SSS chairman Amado Valdez told GMA News Online on Thursday.

The state-run pension fund for private sector employees has sent a request to the Office of the President on increasing the maximum premium to 14 percent from 11 percent.

“But we don’t want to impose a deadline because the president is balancing a lot of things, so we’re just hoping that this can be implemented in April, but our target is dapat within this year,” he said.

The need for higher contributions cropped up since the SSS fund life was shortened by a P1,000 increase in the monthly pension of retired members last year with another P1,000 to be disbursed in 2022.

Duterte approved the P2,000 increase of which the first tranche of P1,000 was disbursed starting March 2017.

The SSS was supposed to implement a higher contribution rate in May last year, but the plan was deferred so it can be implemented in tandem with new tax reform law. Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion law took effect on January 1, 2018.

In a separate television interview, Valdez said the higher contribution rate must cover the “backlog” last year during which the SSS was supposed to implement a premium increase.

The pension fund is targeting to collect an additional P40 million to prolong the fund life of the SSS.

“The multiplier effect for that? We will have more funds for investment,” Valdez noted.

SSS is also proposing to adjust the maximum salary credit. “We are pushing for a salary cap of P20,000 from P16,000,” Valdez said.

(GMA News Online)