The Social Security System (SSS) said it will push through with the mandated contribution rate hike by January 2025 to ensure the fund’s long-term financial stability and future benefits of its members.
“As a system, we follow what the law says, the law says there’s scheduled increases. We will do that,” SSS senior vice president and chief actuary Edgar Cruz said.
Cruz said the increase is not one-sided because members can expect increased benefits when they retire.
“Last year, we made a representation to Malacanang not to defer and they listened to our representation, otherwise fund life would contract,” he said.
Enacted on Feb. 7, 2019 by Congress, the Social Security Act of 2018 rationalized and expanded the powers and duties of the Social Security Commission to ensure the long-term viability of the SSS.
Under the law, SSS should gradually increase the contribution rate by one percentage point every two years until it reaches 15 percent by 2025.
The contribution rate, in accordance with the schedule provided under RA 11199, increased to 14 percent in 2023 from 13 percent in the previous year.Under the new contribution rate, employers will shoulder the 1-percent increase, which means their contribution will now be at 9.5 percent.
The remaining 4.5 percent will be deducted from the employee.The hike in SSS contribution will increase the fund life of the pension fund to 2054 from the originally expected 2032.
SSS president and chief executive Rolando Ledesma Macasaet earlier said the law-mandated contribution increase would translate into immediate benefits to the country’s 13 million workers and would ensure the viability of the SSS fund designed to provide them with social security protection.
SSS expects net income to exceed P100 billion in 2024, fueled by growth in investments and member contributions.
SSS earned P83.13 billion in 2023, higher than P52.6 billion in 2022 as its revenues grew 15.6 percent to P353 billion from P306 billion.