The Social Security System (SSS) on Thursday appealed to members of the House of Representatives for an objective decision on the proposed measures to postpone the contribution rate hike scheduled for this year, as it emphasized that the pension fund’s financial viability may be disadvantaged by its deferment.
SSS President and Chief Executive Officer Aurora C. Ignacio, at the hearing of the House Committee on Government Enterprises and Privatization chaired by Paranaque Rep. Eric L. Olivarez on Thursday urged the legislators to consider the effects of delaying the scheduled contribution hike to benefits given to members, pensioners, and their beneficiaries.
Ignacio explained that provisions of the proposed legislations embodied under House bills 8304, 8310, 8313, 8315, and 8317 will weaken and put more strain on the SSS fund in these difficult times.
“At the outset, we have expressed our opposition to these proposals because of its adverse financial impact to the financial health of the SSS and jeopardize the benefits of members, pensioners and their beneficiaries. However, we support any measures that will benefit our stakeholders as long as it will prioritize the long-term sustainability of the pension fund,” Ignacio said.
Ignacio emphasized that additional contributions—depending on the members’ minimum salary credit category—are just relatively small. The monthly rate increase ranges between P15 and P100 for employed members; and between P30 and P200 for self-employed and voluntary members. Overseas Filipino worker (OFW) members will only see contribution rate hikes between P80 and P200.
“The new contribution rate is just minimal. However, its impact on the SSS fund life will benefit current members and future generations. Every additional peso they will contribute can help strengthen our financial viability and allow us to fulfill our obligations to our members and pensioners in the decades to come,” Ignacio said.
The SSS official also explained that postponing the scheduled contribution hike will decrease the number of benefits and loans that may be given to millions of SSS members. “We estimated a projected loss amounting to P41.37 billion for 2021 alone. And this amount will also continue to increase annually, cutting short the SSS fund life and adding to the contingent liability of the pension fund which is already estimated in the trillions of pesos,” she continued.
“We understand that we are currently in a pandemic situation, but we are appealing to lawmakers to look into the significance and long-term impact of adjusting the SSS contributions for its 38.8 million current members and future members as well,” Ignacio concluded.
The SSS is mandated under Republic Act 11199—or the Social Security Act of 2018 which was approved on March 5, 2019—to gradually implement a biennial 1% contribution rate until 2025. ###
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