State-run pension fund Social Security System said Tuesday it will enforce a new contribution schedule in January 2021 pursuant to Republic Act No. 11199, or the Social Security Act of 2018.
Based on SSS Circulars No. 2020-033-b, 034-b, 035-b, 036 and 039 signed by SSS president and chief executive Aurora Ignacio, the contribution rate will rise to 13 percent in January from 12 percent this year.
“We understand the plight of our covered employers and members, but it is our duty to ensure the longevity of the SSS fund entrusted to us, to allow the continuous delivery of meaningful social security protection to our current and future members, as well as their beneficiaries,” Ignacio said.
The SSS said for employed members, including overseas Filipino workers in countries with bilateral labor agreements with the Philippines and sea-based OFW members, the additional 1 percent would be divided equally between them and their employers, bringing the contribution rate breakdown to 8.5 percent for employers and 4.5 percent for employees.
The SSS said those who are under the P10,000 monthly salary credit would pay a monthly contribution of P1,300 starting January, or P100 higher than P1,200 in 2020.
“Suppose the member is employed, an OFW in a country with a BLA with the Philippines or a sea-based OFW, in that case, the P100 additional contribution will be divided as P50 from their employers for a total employer share of P850 and P50 from them for a total member share of P450,” it said.
The SSS said that pursuant to the Social Security Act of 2018, the minimum monthly salary credit would be adjusted to P3,000 from P2,000, except for kasambahay and OFW members whose minimum MSC would remain at P1,000 and P8,000, respectively, while the maximum MSC would be raised to P25,000 from P20,000.
The MSC to be considered for the computation of benefits under the regular social security program is capped at P20,000. However, contributions pertaining to the MSC in excess of P20,000 would go to the Workers’ Investment and Savings Program—a provident fund that will yield additional pension income for members contributing under it.
“For example, a member will be paying under the P25,000 MSC. Based on the 13-percent contribution rate that would begin in January 2021, his/her monthly contribution will be P3,250, of which P2,600 will go to the regular social security fund, while the remaining P650 will go to the WISP,” the SSS said.
The SSS said the Social Security Act of 2018 aimed to ensure the long-term viability of the fund and provide higher benefits for SSS members and their beneficiaries. It said that upon the full implementation in 2025, these reforms would offset the adverse financial impact of the P1,000 pension increase granted in 2017.
“We hope that members see their contributions as their safety net and savings, which they and their beneficiaries can turn to in times of sickness, maternity, unemployment, retirement, disability, death, calamity, and other contingencies, through the benefit programs and privileges the SSS offers,” Ignacio said.