MANILA, Philippines - The Social Security System (SSS) is preparing for the implementation of the much-delayed increase in members’ contribution rate to 11 percent from the existing 10.4 percent.
The last time the state-run provident fund raised its contribution rate was in January 2007.
However, SSS president Emilio de Quiros stressed that they continue to consult all stakeholders. “We are still open to dialogues with all stakeholders to hammer out proposals and counter-proposals,” he said.
He likewise said they have formed a technical working group with the Employers Confederation of the Philippines (ECOO) to further review the contribution rate increase.
The final proposal will then be presented to the SSS Commission, the highest ruling body of the fund focused on the private sector, which will be fine-tuned with the original proposal further if required or necessary.
“Then we will seek President (Aquino’s) signature,” the SSS chief executive explained. Ideally, the rate adjustment would be implemented at the start of calendar year 2013.
The proposed 11-percent adjustment will result in employers accounting for 7.37 percent and employees sharing 3.63 percent.
The SSS indicated it wants it increased further to 15 percent, or one percentage point every two years, to ensure the fund’s ability to meet all claims and extend benefits to its 29 million members.
With the 11-percent rate, SSS expects to increase the actuarial life of its fund from the current 28 years (up to 2039), to 2046. By international standards, the ideal life span should be 70 years.
Early this month, the SSS held discussions with ECOP which resulted in the employers agreeing “in principle” the necessity of increasing the members’ contributions if the pension fund would maintain its ability to meet future claims and benefits.
“We have agreed in principle, we just have to iron out the details,” said Antonio Abad, head of ECOP’s technical working group.