The Senate Committee on Government Corporations was asked on Tuesday to conduct an inquiry into bigger deductions in workers’ take-home pay to cover the proposed increase in the contribution rate of Social Security System (SSS) members.
Senate President Pro Tempore Ralph G. Recto, in filing Resolution 621, moved to defer its implementation until a comprehensive review is done to “ensure that the SSS Charter remains responsive to the needs of its members and pensioners.”
Recto recalled that the SSS was created under Republic Act 1161, also known as the Social Security law, in order to manage a social security and pension fund for those who are employed in the private sector, as well as self-employed individuals.
The senator said that the vision of the SSS is to provide universal and equitable social protection through world-class service to its 34,576,598 registered members and 1,195,673 pensioners.
Recto’s resolution noted that effective in January 2017, a P1,000 across-the-board increase in SSS pensions was granted to alleviate the plight of pensioners who are receiving meager amount to support their daily subsistence.
He added that during the same period, there was a proposed 1.5- percent increase in SSS contribution rate, from the current 11 percent to 12.5 percent supposed to be effective in May 2017, “in order to maintain its fund life until 2040.”
But Recto said the SSS was not able to implement its plan to increase SSS members’ contribution rate as it awaited the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) law.
However, he added, the SSS recently announced that it plans to increase members’ contribution rate from 11 percent to 14 percent, a three-percentage points rise to cover the years 2017 and 2018.
“If such is to proceed in April 2018, SSS projects to collect about P45 billion in additional revenues at the end of the year,” Recto said, noting that SSS justified the adjustment in contribution rate would enable the pension fund’s actuarial life to be extended to 2044 from the current 2032.
According to Recto, various labor advocates are voicing out their disapproval of SSS’s looming plan to increase the premium contribution of its members by April 2018.
The restive workers, he said, cited “insufficient consultation from its stakeholders, as well as the timing when workers are still struggling to cope with the price increase caused by the recently implemented TRAIN law.”
Recto’s resolution asserted “an immediate need to look into this compelling issue of raising SSS members’ contribution rate and its potential impact to its millions of members.”
Moreover, the lawmaker said the role of Congress to ensure that the proposed increase in the SSS contribution rate shall not further aggravate the collection efficiency of SSS, “because many members and employers may no longer be able to pay the higher premium.”
Recto, likewise, said it is also an appropriate time to revisit the SSS Charter, which was amended 20 years ago, to allow introduction of reforms to enable the SSS to grant additional pension without increasing its premium and contribution rates.