SSS: Scheduled contribution rate increase to extend fund life until 2054

Higher member and employer contributions have resulted in a 22-year extension of the Social Security System's (SSS) fund life, the agency said Thursday.

According to the SSS, the fund life is now expected to last until 2054. It was originally expected to last until 2032, following the P1,000 increase in pension benefits implemented in 2017.

The SSS said that with the Social Security Act of 2018, which mandated the gradual rate increases, the fund life was extended to last until 2044, and the latest projections indicate that it has again been extended until 2054.

The law gradually hiked the contribution rates for SSS members by 1% every two years, starting at 12% in 2019 and bringing it up to 13% in 2023 and 15% by 2025.

Employers would shoulder the one percentage point increase for their employees under the new rate. The employee’s share will remain at 4.5%, while the employer’s share will increase to 9.5% from the current 8.5%.

The Employers Confederation of the Philippines, however, is seeking to postpone the upcoming hike in contributions as businesses are still recovering from the effects of the COVID-19 pandemic.

The agency earlier this week defended the increase, saying this would help fund higher benefit disbursements moving forward.

The SSS is mandated to provide social justice and provide protection to members and their families against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden.

"It is important for us to implement the contribution rate increase together with other social reforms so we could achieve this goal and ensure that we have sufficient funds to provide the short- and long-term benefits, including the immediate financial needs, of our members and pensioners especially in times of contingencies," SSS president and CEO Michael Regino said. —VBL, GMA Integrated News