STATE-RUN Social Security System (SSS) is amenable to increasing pensioners’ benefits as proposed by a number of bills filed in Congress, but stresses the need to raise the contribution rate to maintain its fund life.
“We do not oppose the proposed across-the-board increase of P2,000 in pension benefits as we are sensitive to the needs of the pensioners who have clamored over the years for higher pensions,” the SSS said in a presentation, a copy of which the Inquirer obtained.
However, the SSS is recommending that it “be given the authority to increase the contribution rate to at least 15 percent and allow subsequent increases in the future in order to fund the growing number of pensioners.”
The SSS noted the implementation of a P2,000 across-the-board pension hike without an increase in contribution rate will shorten its fund life to 15 years, which means the reserve fund will be exhausted as early as 2029. At present, the SSS’ fund life is 28 years, or projected to last until 2042.
SSS said pensions increased 22 times between 1981 and 2007, even as the contribution rate saw only four upward adjustments between 1980 and 2014.
The most recent contribution rate increase, implemented last year, jacked up members’ contributions to 11 percent from 10.4 percent previously.
As of April this year, the SSS has over 1.9 million pensioners who receive an average basic monthly pension of P3,169. About 81.5 percent of SSS pensioners get below P4,000 a month.
A higher contribution rate means members will have to shell out 36 percent more than what they are currently paying. To illustrate, a member with a monthly salary credit of P1,000 will have to contribute P150 instead of P110.