The Social Security System is eyeing another increase in the rate of its members’ contribution before the end of President Aquino’s term.
The fund last increased the rate of members’ contribution early this month.
SSS president Emilio de Quiros Jr. said a continual increase in the rate was needed to help ensure the sustainability of the pension fund.
He said the SSS was looking at another 1-percentage-point increase in the rate within the remainder of the Aquino administration following the 0.6-percentage-point hike that took effect on Jan. 1.
De Quiros said the rate hike implemented at the start of this year was estimated to result in P6 billion in additional collection for the fund this year.
Moreover, it is expected to extend the life of the SSS fund up to 2042 from 2039.
A 28-year life span for a pension fund, however, is still way below ideal. Based on international standards, a pension fund should have a life of at least 70 years.
The latest rate increase was met by opposition particularly from militant groups. They questioned the prudence of the increase, which they said would burden SSS members, while officers of the SSS and other government-run firms enjoy “huge” bonuses.
With the latest increase, the SSS contribution rate was adjusted from 10.4 percent to 11 percent of the “monthly salary credit” of an SSS member.
Employers shoulder 70 percent of the contribution, while members themselves shoulder the balance of 30 percent.
“Monthly salary credit” is the base in computing the 11-percent contribution rate.
The minimum monthly salary credit is P1,000, while the maximum is P16,000 (this was raised from P15,000 at the start of the year).
An individual with a monthly salary ranging from P1,000 to P1,249.99 falls under the monthly salary credit of P1,000. This means the monthly SSS contribution should be 11 percent of P1,000 or P110.
An individual with a monthly salary of P15,750 and above falls under the highest monthly salary credit of P16,000. This means the monthly SSS contribution should be 11 percent of P16,000, or P1,760.