Increase in SSS contributions to bring fund life to perpetuity

This is in reference to the news item titled “Lawmaker opposes hike in SSS contributions,” which appeared in The Philippine STAR on July 3. It cited the increase in Social Security System (SSS) contributions and the issue of interest computation in SSS salary loans.

The increase from the present 10.4 percent contribution rate to a new rate of 11 percent is part of the SSS reform agenda that aims to bring back SSS fund life to perpetuity. The new contribution rate also aims to correct an imbalance in funding due to the rapid increase in SSS benefit levels without the corresponding increase in contribution rate, particularly for the period 1980 to 2007.

The salary loan interest computation is an issue that has been addressed by SSS last year. SSS implemented the existing loan guidelines that were approved back in 2000 that employs one of the accepted methods in interest computation. There is no basis for a refund.

In 2012, due to the current low interest environment, SSS revised its salary loan guidelines that resulted in lower interest payments as well as bigger loan proceeds, higher loanable amounts and earlier loan renewals for the greater benefit of members.

Thank you for giving us the opportunity to make clarifications.