The Social Security System on Wednesday announced an increase in the monthly contributions of its members from 12 percent to 13 percent in January 2021.
In a statement, the SSS said the increase would ensure the long-term viability of the pension fund and increase the benefits to be enjoyed by it and its beneficiaries.
The full implementation by 2025 of the restructured rates and other reforms set in Republic Act 11199 or the Social Security Act of 2018 would offset the financial impact of the P1,000 increase in the monthly pension of all member-pensioners which was implemented in 2017.
The premium hike to 13 percent from the current 12 percent of members’ salaries shall not exceed the prescribed maximum monthly salary credit (MSC)
The higher monthly contributions could translate into their savings and safety net against the future hazards of sickness, maternity, disability, unemployment, old age, death and other contingencies arising from loss of income or financial burden for them and their beneficiaries.
The MSC is the determining factor for contributions and benefits based on the member’s monthly earnings.
Upon full implementation in 2025, the reforms under the SSA of 2018 would offset the adverse financial impact of the P1,000 pension increase granted in 2017.
The upgrade in the MSC cap has increased the amount of benefits that members and/or their beneficiaries are entitled to receive, such as sickness, maternity, unemployment, retirement, disability, death and funeral.
From January to October 2020, the SSS disbursed a total of P159.47 billion in social security and employees’ compensation benefits to 3.56 million members and beneficiaries, representing a decrease of 2.6 and 4.8 percent, respectively, from the benefits released in the same period last year.
The decline is a result of the COVID-19 pandemic affecting the number of benefit disbursements from late March to May.
SSS member loan releases from January to November 2020 totaled P58.03 billion for 3.20 million members, a respective increase of 54.5 percent from P20.48 billion and 76.7 percent from 1.39 million members in the same period last year.
Pension loan releases from January to November 2020 reached P3.17 billion combined for 69,813 retiree-pensioners, an increase of 61 percent or P1.20 billion and 11.5 percent or 7,210 pensioners, respectively.