SSS to proceed with contribution rate hike

MANILA, Philippines — The Social Security System (SSS) has decided to proceed with the scheduled contribution rate hike in a bid to protect the actuarial life of the fund.

New SSS president and CEO Rolando Macasaet said yesterday the agency has started to implement the contribution hike as mandated by the Social Security Act.

The STAR earlier reported that Macasaet, upon his appointment, was leaning toward the continuation of the rate hike.

The decision to go ahead with the contribution hike came even amid the call for the SSS to defer the contribution increase that was originally set to take effect at the onset of the new year.

In accordance with the schedule provided under the law, the contribution rate will increase to 14 percent from the current 13 percent.

SSS is mandated to gradually increase the contribution rate by one percentage point every two years until it reaches 15 percent by 2025.

With the decision, employers will shoulder the one percent increase, which means that their contribution will now be at 9.5 percent. The remaining 4.5 percent will be deducted from the employee.

Macasaet maintains that the increase will immediately benefit the country’s 13 million workers and will ensure the viability of the SSS fund, which is designed to provide them with social security protection.

“It will not be a burden on workers, but will be shouldered by employers. Workers earning less than P25,000 per month and who comprise 78 percent of SSS-paying employee members will not be affected,” he said.

Finance Secretary and Social Security Commission chairperson Benjamin Diokno also backs the decision to proceed with the rate hike.

“It is the right thing to do for the institution and its members,” Diokno said.

Under existing tax laws, employers will be allowed to deduct their share of the contribution hike from their taxable income.

Macasaet also appealed to employer groups, such as the Philippine Chamber of Commerce and Industry, the Employers Confederation of the Philippines and the Philippine Exporters Confederation Inc., to treat the contribution hike not as another operational expense, but as an investment to ensure the viability of the workers’ pension fund.

Increasing the contribution rate is among the reforms being implemented by SSS to lengthen it’s fund life and to ensure that the system can provide the benefits for members and pensioners.

Postponing the contribution increase could reduce the fund life of SSS, as the 2054 projection is based on the hike being implemented at the right time.

This means that 22 years have been added to the SSS fund life with the contribution rate increases since 2019.