Amidst rumors of the impending contribution rate increase, Social Security Commission (SSC) Chairman Amado D. Valdez claimed that the potential change is still going through considerations. Initially, the implementation for the said alteration was reported to take place starting January of 2018.
According to Valdez, the move to increment SSS members’ monthly contribution is meant as a “last resort” which will solidify the program’s finance with present and future members as well as investors as it benefactors.
Should the approaching modification pushed through, the SSS chairman said that the increase will only be at the minimum.
In addition, the government-run social insurance program is seeking alternative means to gather revenue to pool into the pension fund.
Based on the most recent collected info, the tallied amount of all SSS members’ contributions across the span of the first quarter of 2017 had seen an increased of 9.62 percent or tantamount to P78.64 billion.
Coinciding this apparent growth is the SSS investment revenue which showed a significant 12.27 percent growth for the same period. As a result, the money pool has reached P18.35 billion from 16.09 billion.
“We are looking at various income-generating schemes including disposal of sub-optimal properties to maximize revenues from these real estate properties,” said Valdez.
The topic on the contribution hike arose amidst the ongoing Senate hearings about the SS Reform Act of 2017.
Staunch advocate of the reform and author of the bill, Senator Richard Gordon, claimed that the SS Charter Amendment is anticipated to be a milestone when passed which he will insist about by year end.
“We strongly support Sen. Gordon’s mantra that we should work, save, and invest to prosper. Right now, SSS is the best and affordable savings mechanism for our workers,” according to Valdez.
Derivative from SSS Actuarial and Risk Management Group’s most recent pension simulation, a member which accumulated 45 years of active service and earns a monthly income of no less than P30,000 is entitled to a monthly pension money amounting to P15,700. This is equivalent to 52% of the eligible pensioner’s last salary which is less than P16,000 based on the monthly salary credit (MSC) ceiling.
Should the MSC be increased to P30,000 by 2022, however, the same person’s monthly person will be set at P29,300 or synonymous to 98 percent of his retirement’s last salary.
The suggested bill was aimed at improving the existing 2-decade old SS Charter. At the present, there is an ongoing consideration at the Senate committee level about the proposed bill.
The bill is listed as a priority bill for the Legislative-Executive Development Advisory Council (LEDAC) Executive Committee.
If the bill is passed, the proposed changes will see a systemization duties, accountabilities, and powers of the Social Security Commission (SSC). The added power will give the SSC more flexibility and control in diversifying SSS investments to create and enhance the earnings of the pension fund. Consequently, this gives SSS members better disbursements of the benefits they require.
In addition, the Commission is also to embody leniency towards delinquent members when accruing penalties and to identify proper monthly salary credit based on sound findings in relation to the health of the pension fund.