Since the start of the year, we have heard and seen in newscasts about the new SSS contribution rate, which brought mixed reactions from the public.
When I was interviewed a week ago in PTV-4’s “Laging Handa” Public Briefing with Secretary Martin Andanar and Undersecretary Rocky Ignacio, I mentioned that such increase is one of the significant provisions under Republic Act 11199 or the Social Security Act of 2018, which was approved by President Duterte on March 6, 2019. Aside from this, such provision will enhance the fund life of the System to benefit its current and future contributors.
On top of this, our main goal is to protect the fund life of the SSS, which has been a part of every working Filipino in the private sector for 63 years.
In January 2021, the SSS implemented a contribution rate of 13 percent from the previous 12 percent. On the other hand, the minimum monthly salary credit has been set to P3,000 from P2,000 (except for Kasambahay and OFW members whose minimum MSC will remain at P1,000 and P8,000, respectively), while the maximum MSC is now at P25,000 from P20,000.
For employed members, land-based oversease Filipino workers members in countries with Bilateral Labor Agreements (BLAs) with the Philippines, and sea-based OFW members, the 1 percent will be divided between them and their employers, bringing the contribution rate breakdown to 4.5 percent for the employees and 8.5 percent for employers.
Under the new contribution scheme, a member paying under the P10,000 MSC will now pay a monthly contribution of P1,300, which is P100 higher than the P1,200 in 2020.
Now, let’s look at this angle in our daily setting. An ordinary individual may spend around P30 for cellphone load in a week. In a month, his expenses on such load will be P120. Under the average MSC with a P100 increase this year, this will be just a minimal but significant amount, as the member will reap his benefits in case he meets a contingency.
Suppose the member is employed, in that case, the P100 contribution will be divided as follows: P50 from their employer for a total employer share of P850, and P50 from them for a total member share of P450.
While the MSC to be considered for the computation of benefits under the regular social security program is capped at P20,000, contributions pertaining to the MSC in excess of P20,000 will go to the Workers’ Investment and Savings Program (WISP), a provident fund that was launched late last year as part of the provisions under the new SSS Law that will yield additional pension income for members contributing under it.
Compared with the previous programs of SSS like the Flexi Fund for overseas Filipino workers (OFWS), which was launched in 2001, and the Personal Equity and Savings Option (PESO) Program in 2015 that are both voluntary provident programs, WISP is automatic for those contributing above P20,000 MSC up to the prevailing maximum MSC. As the latter is geared towards retirement, it doesn’t allow any refund or withdrawal during the member’s contributing years, unlike the Flexi Fund or PESO Fund Programs that I have discussed in this column last week.
For example, a member will be paying at the P25,000 MSC. Based on the 13 percent contribution rate, his/her monthly contribution will be P3,250, of which P2,600 will go to the regular Social Security fund, while the remaining P650 will go to the WISP.
The SSS emphasized that the said reforms will allow members to save more for their retirement.
Compared with our Asian counterparts, the SSS remains the lowest but most accessible pension scheme in the country that offers seven kinds of benefit programs and various loan privileges.
So, let’s not think of this as a burden but an investment that members and their beneficiaries can avail of in the future.
As what I’ve always told my colleagues, it pays to be prepared for anything and everything.
Have a safe and lovely day!
Aurora C. Ignacio is SSS president and chief executive officer.
We welcome your questions and insights on the topics that we discuss. E-mail mediaaffairs@sss.gov.ph for topics that you might want us to discuss.
1 comment
mam mi ask me total contribution in my sss