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Tuesday, February 11, 2003
SSS contribution rate higher starting March
By Cherry T. Lim
THE Social Security System (SSS) will increase the monthly contribution rate of members from 8.4 percent to 9.4 percent beginning March 1, but the increase will be shouldered solely by the employers.
The news drew a reaction from the Cebu Chamber of Commerce and Industry (CCCI), which expressed surprise at the latest development.
In an advertisement last Friday in a national newspaper, the pension fund said the employees would continue to contribute 3.33 percent, while the employers’ share would rise to 6.07 percent from 5.07 percent.
Helen Solito, SSS cluster head for Central Visayas, said the SSS had been seeking an increase in the contribution rate since last year to “correct the imbalance between contributions and benefit payments.”
In a statement, SSS Executive Vice President Horacio Templo said benefits had been exceeding contributions since 1993, placing the fund at risk of being depleted by 2015.
“As of September (2002), SSS collected P28.4 billion, but its benefit disbursements totaled P32.3 billion. And for the first time since it was formed in 1957, the institution dipped into its reserves to cover the P3.85 billion shortfall,” Templo said.
To further justify the increase, he added: “While pensions increased 19 times since 1980 … the contribution rate has remained the same.”
Solito said the one percent increase had been approved by President Arroyo following consultations with employers’ groups and employees’ groups.
Opposed
But CCCI president Jose Ng expressed surprise, saying the public had not been made aware that new proposals to increase the contribution had been discussed after “everybody opposed” the initial proposals to hike the rate last year.
“There was great opposition from the public. Daghan ni-oppose. Wa diay to taga-i og consideration?” Ng said. (Many opposed the rate increase. Was this not given consideration?)
But Solito explained that the employers had been consulted, albeit in Manila.
“Commissioner Donald Dee, who is the president of the Employers Confederation of the Philippines, is a member of the Social Security Commission,” she told Sun.Star.
The commission recommended the one percent increase.
“It is a very modest increase,” Solito said. “We are expecting that that would stabilize the fund in the next five years.”
As of September 2002, the investment portfolio of the SSS totaled P150.4 billion, of which P19.6 billion was in government securities, P41.3 billion in equities, P12.2 billion in developmental loans, P28.4 billion in member loans, P41.7 billion in housing loans and P7.3 billion in real estate.
Templo, who is also SSS chief actuary, said investment income of P200 billion from 1957 to 2001 had helped to keep fund depletion at bay.
(February 11, 2003 issue)
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