Additional hike in SSS contributions to cover expanded maternity leave?

MANILA, Philippines – The Social Security System (SSS) may have to increase members’ monthly contribution rate to 12.6 percent this year to cover the Expanded Maternity Leave Act recently signed into law by President Rodrigo Duterte.

Under Republic Act (RA) No. 11199, the Social Security Commission (SSC) — the pension fund’s highest policymaking body — can implement contribution rate increases even without the President’s approval, unlike the old charter wherein only the chief executive can green-light rate adjustments.

As such, the SSS was looking into adding another 0.5-0.6 percentage point to the contribution rate to cover the additional cost of P7.5 billion a year to be incurred from the bigger number of days of maternity leave, SSS president and chief executive Emmanuel F. Dooc told reporters Thursday.

The Expanded Maternity Leave Act has extended the number of paid maternity leaves to 105 days from 60-78 days at present.

Dooc said that initially, the cost to cover the bigger number of maternity leaves was supposedly to be included in the annual budget, but the bicameral version of the bill later on put the burden to the SSS, which administers maternity benefits.

In this regard, the SSS may have to raise the contribution rate by a total of 1.5-1.6 percentage points this year to 12.6 percent to implement both RA 11199 as well as the Expanded Maternity Leave law, Dooc said.

Meanwhile, Dooc refuted senatorial aspirant Neri Colmenares’ claim that the state-run pension fund’s uncollected contributions and penalties reached P437 billion since 2010. He said the latest Commission on Audit (COA) report showed that their cumulative uncollected dues only reached P13.8 billion from 122,658 employers as of 2017.

“The [latest] COA audit covered only over 122,000—roughly 14 percent of our employers. But not all employers are delinquent; there are more who are not delinquent,” Dooc said.

“I hope he [Colmenares] can come up with the numbers that should likewise be established by an independent and objective entity like the COA,” the SSS chief added, as he claimed that the Bayan Muna chairman cited “old” findings.

Colmenares had said that the SSS does not need to hike the contribution rate as the pension fund has yet to improve its collection rate.

According to Dooc, SSS had gradually increased its contribution collections from members—from P132 billion in 2015 to P144 billion in 2016, P159 billion in 2017, and P181 billion last year.

This year, he said, SSS targets to collect P223 billion.

For Dooc, politics was in play whenever Colmenares attacked the SSS.

“I know where he [Colmenares] is coming from, of course. He is trying to project that he is the champion for the workers,” Dooc said.

“We at the SSS actually are doing our very best to provide protection to the members, which now numbers to 38 million. In fact, the new law, Republic Act 11199, was designed to ensure the long-term viability of the Social Security System,” he added.

“The law will stabilize the fund life of the system. We can fulfill obligations to members, [but] not pay more benefits, otherwise we will bankrupt the system,” Dooc further said.

Colmenares has been pushing for further pension increase but opposed any contribution rate hike, which RA 11199 empowered the SSC to implement.

The SSS chief said that there lies the difference between a politician and a civil servant—the latter pursues long-term reforms even if they were unpopular.

To recall, the fund life of SSS was slashed by 10 years to 2032 from 2042 previously when the additional P1,000 a month were given away to pensioners starting 2017.

The Social Security Act of 2018 mandated a 1-percentage point increase in the contribution rate every two years, until it reaches 15 percent, starting this year.

At present, the contribution rate stands at 11 percent.

As such, this year’s contribution rate hike to 12 percent will be followed by three more 1-percentage point increases in 2021, 2023, and 2025.

Two-thirds of the contribution rate increase will be shouldered by the employer.

With a higher contribution rate, the fund life of SSS will be extended until 2045, Dooc said. /kga