SSS defends contribution rate hike, says it doubled fund life

The Social Security System (SSS) on Tuesday defended the scheduled contribution rate hike for this year, as it said this would be the last tranche of increases which doubled the fund life to 28 years moving forward.

Under Republic 11199 or the Social Security Act of 2018, the SSS is scheduled to raise the contribution rate to 15% from 14% previously. It will also increase the minimum monthly salary credit (MSC) to P5,000 from P4,000, and the maximum MSC to P35,000 from P30,000.

“The scheduled contribution rate and MSC increases are among the most important reforms under RA 11196 that aim to ensure the long-term viability of the SSS,” president and chief executive officer Robert Joseph De Claro said in an emailed statement.

“With the last tranche of contribution rate and MSC increases, the SSS fund is projected to last until 2053 — doubling the fund life to 28 years (vs 2032 or 14 years when an actual valuation study was performed in 2018),” he added.

This would be equal to an increase of around P190 in the monthly contribution of workers, which would in turn raise their daily salary credit by P30.

The SSS estimates such increases to result in P51.5 billion in additional collections, with 35% of which or P18.3 billion going to the Mandatory Provident Fund (MPF) accounts of SSS members.

“Such additional collection amount also enables SSS to support national government in times of difficulty, particularly as regards granting calamity loans,” De Claro said, as the SSS last year released P9.7B in calamity loans.

For his part, Executive Secretary Lucas Bersamin guaranteed that the hike in the contribution was thoroughly studied.

''I want you to understand. Ang mga ganyan [Those] increases, they are studied well, studied based on actuarial consideration ‘no, napakahirap na sabihin mo huwag kayong mag-increase [it would be very difficult to tell them not to increase], we cannot be that arbitrary,'' Bersamin said at a press briefing.

''We have to recognize that this SSS has a very respected actuary, mayroon silang pag-aaral tungkol diyan [they have studied it well]. If you always meddle in their management of their affairs where there are very specialized, it will not work, it will not work,'' he added.

De Claro's statement was released days after former SSS president and CEO Rolando Ledesma Macasaet called on Malacañang to suspend or gradually implement the Social Security Act, as this would ease the financial burden on SSS members without significantly affecting the fund’s longevity.

House Assistant Minority Leader and Gabriela Women’s Party-list Representative Arlene Brosas also cried foul over the scheduled increase, which she described as a “cruel New Year’s gift” as the timing is “absolutely tone-deaf” given the recent inflationary environment.

"We understand, we are sensitive, we acknowledge 'yung mga request ho on the suspension ng SSS for the increase pero balikan ko ho, mas mahihirapan po ang mga manggagawang Pilipino 'pag isu-suspend natin to or ide-delay," De Claro said in a separate briefing.

"Kasi po ang perang makukuha ho ng SSS ay magagamit ho para mapa-improve po ang benefits natin in the future," he added.

(We understand, we are sensitive, we acknowledge the requests to suspend the SSS increases but Filipino workers will face difficulties if we suspend or delay because the money we will raise will be used to improve our benefits in the future.)

Under its mandate, the SSS is tasked to promote social justice and provide protection to members and families against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden.

“The favorable outlook should enable SSS to actively participate in the capital markets and contribute to jobs generation as companies build and expand their businesses,” De Claro said.

“Ultimately our goal is to make SSS relevant in the life of every Filipino at every point in their lives by providing quality social protection and espousing the value of savings for the future,” he added. — RSJ, GMA Integrated News