(Source: Inquirer.net | February 16, 2019)
The Social Security System (SSS) will be increasing contributions rate by 12% this year to replenish the state-run fund life by six years.
A source said the amendments to the SSS’s charter was signed by Duterte last Feb. 7.
Dooc said the SSS will immediately craft the law’s implementing rules and regulations (IRR), such that the provision mandating a 1-percentage point increase in the contribution rate every two years, until it reaches 15 percent, can be implemented this year.
At present, the contribution rate stands at 11 percent.
As such, this year’s contribution rate hike will be followed by three more 1-percentage point increases in 2021, 2023 and 2025.
Under the SSS Rationalization Act, the Social Security Commission (SSC)—the pension fund’s highest policymaking body—can implement contribution rate increases even without the President’s approval, unlike the current charter wherein only the chief executive can green-light rate adjustments.
Two-thirds of the contribution rate increase will be shouldered by the employer.
With a higher contribution rate, the SSS’s fund life will be extended until 2038 from 2032 at present, Dooc said.
This means that SSS members and pensioners can still enjoy their benefits for at least 20 more years from now.
To recall, the SSS’s fund life was slashed by 10 years to 2032 from 2042 previously when the additional P1,000 a month were given away to pensioners starting 2017.
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