THE chief of the Social Security System (SSS) said last Thursday the state-run pension has enforced its mandatory contribution hike.
SSS President and CEO Rolando Ledesma Macasaet said the increase in contribution would translate to “immediate benefits to the country’s 13 million workers and will ensure the viability of the SSS fund designed to provide them with social security protection.”
Under the law, the SSS should gradually increase the contribution rate by one percentage point every two years until it reaches 15 percent by 2025.
“In accordance with the schedule provided under RA 11199, the contribution rate increased to 14 percent from 13 percent in the previous year,” read a statement issued last Thursday by the SSS.
The SSS said the employers will shoulder the 1-percent increase, which means their contribution will now be at 9.5 percent. The remaining 4.5 percent will be deducted from the employee.
The SSS added that Finance Secretary and Social Security Commission Chairman Benjamin E. Diokno has expressed support for the new contribution rate. The SSS said Diokno noted that the contribution hike was the “the right thing to do for the institution and its members.”
“The contribution hike will benefit the workers with the SSS being able to provide a financially viable social protection system to Filipino workers and their families,” Macasaet said.
“It will not be a burden on workers but will be shouldered by employers,” he added. Macasaet said that workers earning less than P25,000 per month, who comprise 78 percent of SSS-paying employee members, will not be affected.
Macasaet explained the fund’s officials opposed the request by various business groups to suspend the contribution hike. He said the SSS’s argument is that “postponing the measure would reduce the actuarial life of the fund.”
The groups that called for the suspension of the contribution hike included the Philippine Chamber of Commerce and Industry (PCCI), the Employers Confederation of the Philippines (ECOP) and the Philippine Exporters Confederation Inc. (PECI).
“[We] gave due consideration to the plight of small employers in past contribution hikes, but [we] ultimately had to act in favor of workers’ interests and the fund’s long-term solvency,” the SSS statement read.
Macasaet clarified that employees would not be required to shoulder the additional financial burden that goes with the contribution hike.
The SSS chief said he is “appealing” to the PCCI, the ECOP and the PECI, “who we consider our valuable partners in our mission to provide social protection to our workers, to treat the contribution hike not as another operational expense but as a noble investment to ensure the viability of the workers’ pension fund.”
“We appeal to our friends in big business to help us provide meaningful protection to the members of the working class and their families against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden,” Macasaet added.