MANILA, Philippines – Social Security System (SSS) is planning to raise the pension funds and contributions through an indexation scheme as it targets to streamline the changing economic climate of the country.
Emmanuel F. Dooc, SSS President and Chief Executive Officer, revealed that the organization is looking forward to the possibility that indexation would be adopted, as disclosed by the SSS official to journalists yesterday in a briefing.
According to him, SSS aims to provide retirees higher replacement income compared to their actual salary while they are still working. The case is the same with the pension plan dependent on the cost of living. Dooc explained that the indexation scheme would be implemented for both contributions of members and payouts for the pension.
The SSS President stated that the stance is more of a political stance given they are trying to catch up with the economic weather. Nonetheless, they still have to develop a formula on how to arrive at their goal, particularly in making it happen.
However, the plan still has to pass through legislative branch before the President sees to it. Dooc claimed that they intend to present it to the national leader.
Dooc noted that they do not entirely disagree with the projected general hike of pension by P2,000, which is currently halted. Nonetheless, he added that the given raise would demand curative requirements, specifically on the fiscal part.
SSS President claimed that he deems the management is in favor of the increase but reiterated that his organization and Social Security Commission are responsible authorities, which means they have to provide only the added benefits provided they could source the fund, and not inflict its members.
The proposed three rectification measures of SSS that would complement the pension raise are maximum monthly salary credit (MSC) hike, additional contribute rate, and MSC increase.
An 11 percent contribution rate every month is deducted in a member’s MSC, particularly not more than P16,000, to which the percentage is being shared by the employee at 3.63 percent and employer at 7.37 percent. This is in conformity with the Republic Act 8282 or Social Security Law.
SSS is considering a hike in contribution rate from 11 percent to 17 percent by gradual 1.5 percentage points raise per annum. This means, the final level of increase would be reached by 2020.
Also, Dooc claimed that through the P20,000 MSC increase, the life of funds would be reduced by a couple of years. From 2042, the fund span would drop to 2040.