Members of the Social Security System on Friday were told to prepare for higher monthly contributions starting January 2021 to ensure its long-term viability and increase benefits for contributors and beneficiaries.
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The increase in the contribution rate to 13% of members' monthly salary from 12% will proceed as scheduled in January. It is a step towards the full implementation of the restructured rates and reforms up to 2025, the SSS said on Facebook.
This move will offset the financial impact to the fund of the P1,000 increase in the monthly pension of all member-pensioners that was implemented in 2017.
Finance Secretary and SSC Chairman Carlos Dominguez said the hike would not exceed the prescribed maximum monthly salary credit or MSC. The MSC is the determining factor for contributions and benefits, which is based on the member's monthly earnings.
Dominguez said he hoped members would see the higher monthly contribution as their savings and safety net against the future hazards of sickness, maternity, disability, unemployment, old age, death, and other contingencies resulting to loss of income or financial burden for them and their beneficiaries.
Through the Social Security Act of 2018, the SSS introduced the Unemployment Benefit for members involuntarily separated from their jobs, and extended the MSC cap for the computation of benefits to P20,000.
The upgrade in the MSC cap added on to the benefits that members and, or their beneficiaries are entitled to receive, such as sickness, maternity, unemployment, retirement, disability, death, and funeral.
"The SSS' investments are well-managed and has allowed the pension fund to respond to the needs of members despite the drop in collections during the pandemic," Dominguez said.
"The SSS expects to further improve its financial performance and have better collections in the years ahead as the economy recovers from the coronavirus pandemic and regains its pre-COVID growth momentum," he added.