Private sector pension fund manager Social Security System said Wednesday it plans to increase members’ contribution rate to 17 percent by 2020 and adjust it based on inflation in the succeeding years.
SSS president and chief executive Emmanuel Dooc said the plan was to increase the contribution rate to 17 percent by 2020 from the current 11 percent of members’ salary. It will then be indexed to inflation.
“Even without increase in pension, part of SSS agenda is to gradually increase the contribution. Hopefully we can go to that direction, indexation,” Dooc said.
Dooc said aside from the indexation of members contribution, the pension of members would also be indexed accordingly.
“Pension benefit will be based on cost of living, salary of workers, so that the replacement income when they retire will not be very low compared to the actual salary when they were still working,” said Dooc who used to head the Insurance Commission.
“That will be in the pipeline. [With] indexation, we will be amending [the charter],” he said.
President Rodrigo Duterte deferred the Senate and House resolution to release the P1,000 increase in SSS pension.
Dooc said SSS proposed remedial measures to offset the possible P32-billion losses coming from the P1,000 pension increase. These include additional contributions, raising the maximum monthly salary credit from 16,000 to 20,000 and increasing the minimum salary credit from P1,000 to P4,000.
He said from the current 11 percent of the total salary of members, it would be increased by 1.5 percentage points annually until it reached 17 percent by 2020.
“If you combine all these remedial measures, end result is we will have a longer fund life, adequate fund to sustain and support the increase. These are the some conditions that we want to introduce together with the additional pension increase,” Dooc said.
The SSS chief said the fund was willing to give the P1,000 pension increase as long as the remedial conditions would take effect immediately.
Dooc said the pension increase could also be given after the implementation of the Comprehensive Tax Reform Program.
“That is another ideal situation”•if we can afford to wait for the passage of the tax reform measures. As pointed out by economic managers, people will have more money in their pocket so they can afford to pay for any additional contribution to the SSS,” Dooc said.