MANILA, Philippines - The state-owned Social Security System (SSS), the pension fund for workers in the private sector, is seeking Malacañang’s approval of its proposal to increase the contribution of members by 0.6 percent within the first half of the year.
SSS President and Chief Executive Officer Emilio de Quiros Jr. said the pension fund wants to increase the contribution from 10.4 percent to 11 percent, or 0.6 percent, of the employee’s monthly salary. He did not provide details of the actual amount the increase would contribute, and the current base figure.
“Raising the contribution rate to 11 percent of the monthly salary will be equally shared by employers and workers,” de Quiros said in a news conference on Monday.
“There are no more obstacles like a wage hike, and we are now closely coordinating with the employers and workers’ groups to finalize [the increase],” he said.
The contribution increase has been in the pipeline, but employers managed to convince the Aquino administration to suspend the measure to 2013 due to the recent calls for an increase in the minimum wage, which was also not implemented.
This time, de Quiros said employers were more receptive on the increase, which meant to add at least seven years to the actuarial life of the pension fund.
“Once we get the President’s nod, we would implement the new rate within the first half of the year, hopefully,” he added.
The increase would also extend the benefits and pension to its members from 2039 to 2049, he said.
Under the 2007 actuarial valuation, the pension fund’s life is seen to last until 2039, or by 27 years.
“Ideally, the pension fund’s actuarial life must be 70 years,” he said.
“We need to increase the rate of contributions so we can also improve the package of benefits to the members.”
The contribution rate of SSS’s 10.4 percent, which is being deducted from the employee’s salary, is less than half of the 21-percent rate of the Government Service Insurance System, the pension fund for state workers.
The average contribution rate among Asian countries is 23 percent and among European countries is at 35 percent.
The last increase in the contribution rate by SSS was made in 2007 with a 1-percent adjustment.