SSS vows more benefits with increase in premiums

Monday, June 6, 2011

STATE-run Social Security System is bent on implementing increases in monthly contribution this year for more meaningful benefits for pensioners and members.

SSS president and chief executive officer Emilio de Quiros Jr. said there should be deliberate changes in the pension fund of its more than 29 million members.

Have something to report? Tell us in text, photos or videos.

De Quiros, who briefed local members of media Thursday, said Filipino workers and pensioners have sought for meaningful benefits in years, which is not possible without updating the pension structure.

This means the government owned and controlled corporation will increase its contribution rate from 10.4 percent to 11 percent monthly to enable workers to accumulate forced savings, which will be put to good use at retirement.

De Quiros said the SSS has slumped in terms of its fund life from a perpetual fund status in the 1980s to its present lifespan of its funds until 2039.

By increasing premiums, he said they will be able to increase the life of SSS until 2046, as it continues to strive for fund perpetuity.

He added pension benefits increased by more than 20 times since the 1980s to 2007 but the premiums were still pegged at 8.4 percent which almost depleted their funds if not for their investment earnings.

By increasing contributions slowly and the maximum salary credit from P20,000 to P15,000, he said more benefits from loans to pensions will be adjusted soon.

He said both the employer and employee will share the increase with the employer sharing 7.37 percent, while the employee sharing the 3.63 percent of the 11-percent monthly contribution.

De Quiros added the increase will give pensioners a one-time P500 grant, a 10-percent across-the-board increase in pension and higher computed benefits for members.

“If the SSS does not start to make small adjustments now, the time will come when it will be forced to increase contribution rates significantly to ensure that those paying contributions today will get pensions in the future,” he said.

The current contribution rate of 10.4 percent of the monthly salary is less than half the rate in the public sector under the Government Service Insurance System, which is 21 percent of the monthly salary.

The SSS also added the average Asian contribution rate is currently at 23 percent, while it is at 35 percent in European countries. (JM Agreda)