The Social Security System (SSS) posted a reminder to the public regarding the scheduled increase in contributions starting January 2014. The state-owned pension fund had earlier announced the increase which makes up 11% of the employee’s total monthly income, higher than the previous 10.4%. The increase was backed by SSS Resolution No. 711-s.2013 last September 2013 and duly supported by President Benigno S. Aquino III.
The 0.6 increase will be divided equally among employees and employers but voluntary and self-employed members have to bear the brunt of the entire increase, of course.
Emilio S. de Quiros, Jr., SSS president and chief executive officer, announced that the increase is implemented to ensure that the fund’s actuarial life will be lengthened up to 2043. This increase is also included in the SSS Reform Agenda to help in reducing the agency’s unfunded liabilities.
The actual contribution amount will still depend on the employee’s salary, although the same percentage rates will apply across all levels. The pension fund also released a table of the specific contributions to be paid based on the applicable monthly salary credit (MSC) for its members to be guided accordingly.
Employed members will be paying 3.63% of the total amount due while the employer has to pay the 7.37% counterpart for the contribution.
Aside from the increase in the contribution amounts across all levels, the state-owned pension fund also increased the maximum MSC from P15,000 to P16,000, with members needing to pay a total of P1,760 for this highest allowable MSC.
The higher MSC is deemed as good news by many employees but a number are still wishing that the SSS would further increase the maximum MSC to cater to those with higher salaries. Currently, no matter how much the member’s salary might be, whether it is P16,000 or P160,000 (or any amount, really), the highest contribution he can pay each month is within the P16,000 MSC only.
Advanced Payments for Update
SSS urges those who paid their contributions in advance to pay the difference from the old contributions to the new one so that their payments can be credited properly. Members have to use the Contributions Payment Return for SE/VM or RS-5 form when paying, also indicating that the amount paid is for underpayment.
SSS warns members who fail to pay the difference that their advanced contributions will still be credited to their account but at a lower MSC. They may request for a refund but are encouraged to pay the difference, instead, to ensure that the contributions will be within the correct MSC.
Increased Contribution an Added Burden
The Alliance of Health Workers (AHW) expresses anger over the hefty increase, saying that it would be an added burden to the workers. AHW president Jossel Ebesate believes that the SSS was not able to manage its funds properly, especially when it was announced that the board of directors had received hefty bonuses as high as P1 million.
The exorbitant bonuses were said to be for the board of directors’ perfect attendance in meetings and the agency’s good performance.