It was reported that the proposed increase in the contributions of members of Social Security System (SSS) scheduled this month has been deferred until stakeholders agree on when to implement the adjustment.
But, according to the SSS, due to the delay, there is a possibility that the proposed increase by the pension fund may grow higher.
The proposed 0.6% hike in SSS members' contribution was approved in principle by the Social Security Commission (SSC) last March 16, and documents of the pension fund's proposed increase was supposed to be submitted to the Office of the President last week.
"Nothing has been submitted to the Office of the President yet because the SSS Board of Directors has not yet decided on when to implement the increase in members' contribution rate," SSS Senior Vice President Judy Frances A. See was quoted as saying by BusinessWorld.
"Various stakeholders who are represented in the SSC have not yet reached a consensus on when to issue the planned increase in contribution rate," See added.
Currently, SSS members' contribution is at 10.4%, with the proposed 0.6% increase, it would go up to 11%.
The SSS wants to implement the increase to bring back the pension fund's life to perpetuity, and allow SSS to pursue with its plan to adjust the benefits that members are getting, as well as provide a 10% across-the-board pension increase.
SSS' last actuarial valuation in 2007 indicates that the pension fund was estimated to last only until 2039. In a 1980 valuation, the fund was estimated to last until perpetuity.
With the implementation of the hike in contribution rate, another nine years would be added to the pension fund's life.
SSS pension benefits were increased 21 times from 1980 to 2007. On the other hand, the contribution rate was raised only twice. The contribution rate was pegged at 8.4% for 23 years and was adjusted to 9.4% in 2003 and to 10.4% in 2007.
The maximum salary credit (MSC) – the compensation base for contributions and benefits of members as indicated in Section 18 of the Social Security Law – will also be adjusted to P20,000 from P15,000.
