In January 2017, President Duterte has approved the increase in monthly pensions. Many pensioners have been enjoying the benefit of the increase that had been disbursed since March. But, until when does the SSS can sustain the pension hike?
As the chief executive officer of SSS said that the fund life of the company is running short due to the pension hike, thus they come up with a proposal to increase the monthly contribution of the SSS members.
Is it a fair proposal?
Alongside with the approval of the increase of monthly pension, President Duterte also ordered to increase the monthly contribution of members to an increment of 1.5 percent each year. In 2020, the increase will have reached to 17% from the 11% of the current year.
Emmanuel Dooc, the SSS president, reiterated that the Social Security Commission will approve the hike in the contribution rate as soon as the tax reform package will be implemented in January.
The present contribution rate of 11% is shared by the employee (3.63%) and the employer (7.37). Supposedly, the initial schedule of implementation for the rate increase is in May. But, it had to wait for the approval of the tax reform package that aims to increase the employee’s take home pay.
The proposed increase would cover the months that the rate was hold. Dooc also said that the increase in the contribution rate is necessary to sustain the fund life of the company until 2042. Thus, the pension fund will also be extended to 2049-2051.
Aside from the contribution rate increase, the company is also planning to increase the monthly salary credit from the current Php16,000 to Php20,000 to lengthen the fund life of the company.
In case that the SSS Charter be amended, the proposed increase won’t need the approval of President Duterte, but rather allow the Social Security Commission alone to approve the adjustment. The company is also optimistic about the amendment be approve before the end of 2017.