MANILA, Philippines — At least half of the total members of state-run pension fund Social Security System (SSS) may not be able to enjoy their pension once they retire amid unstable contributions.
During a hearing of the Senate committee on government corporations and public enterprise, the SSS admitted that some of its members may not be able to get significant benefits when they retire.
SSS chief actuary Edgar Cruz said current registered members of SSS total to 40.97 million, but not all are consistently paying, which means that retirement benefits are at risk.
“We have 41 million (members), but not all of them are actively paying. Some of them paid just once or twice and then stopped already,” Cruz said.
“This means that they are an SSS member, but will not get significant benefits. Our estimate is that maybe close to 20 million (members) will not have significant insurance,” he said.
It should be noted that the benefits of members once they retire are computed based on their regular contributions to SSS while they were still working.
Members pay monthly contributions to the state-run pension fund, which in turn are being used for benefits such as retirement, as well as other loans under SSS.
Currently, the contribution rate is at 13 percent of a person’s monthly salary credit, which is shared at an 8.5:4.5 ratio by the employer and employee, respectively.
Once an SSS member retires, the member will be entitled to a monthly pension that could range from P2,000 to as much as nearly P20,000.
The SSS earlier pitched for an increase equivalent to 14 percent of the monthly salary credit following the implementation of the tax reform program.
The SSS said the contribution hike should be pursued due to the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which effectively increased the take-home pay of Filipinos amid reduction in personal income taxes.
The Social Security Act of 2018 mandated an increase in members’ contribution, which started in 2021 and is scheduled for another round by 2023 and 2025.
However, the law also gave the President the power to postpone increases in contributions at a time of emergency or calamity.
SSS earlier said it has disbursed a record P1.1 trillion in benefit payments from 2016 to 2021 to its members, pensioners, and other beneficiaries.
The aggregate amount for the six-year period of the Duterte government is double the P550 billion in payments from 2010 to 2015 or during the term of the late president Benigno Aquino III.
SSS said the improvement in benefit disbursements is largely attributed to the reforms implemented in the past years, including the Social Security Act in 2018, the Expanded Maternity Leave Law in 2019, and the additional P1,000 benefit pension grant which started in 2017.
Right now, the SSS fund life is estimated to last until 2054 amid the anticipated increase in the number of paying members due to the expansion of SSS’ membership coverage and increases in the contribution rate.