Social Security Commission (SSC) Chairman Amado D. Valdez on Thursday said the pension fund is still studying the possible implementation and effects of a monthly contribution rate increase, contrary to reports that it will implement a contribution adjustment by January 2017.
“The contribution increase is our last option. However, should the institution be pushed to do such action, to secure the fund life of the Social Security System (SSS) and for the benefit of our current and future members and pensioners, we would like to assure the public that the contribution rate increase will be at the minimum amount only. We are trying our best to find ways to generate income for the pension fund,” Valdez said.
Valdez said that under the current administration, based on the latest data, collection from members’ contributions as of the end of first semester of 2017 increased by 9.62 percent to P78.64 billion.
SSS investment income also increased by 12.27 percent during the same period from 16.09 billion to 18.35 billion
“We are looking at various income-generating schemes including disposal of sub-optimal properties to maximize revenues from these real estate properties,” Valdez said.
Talks on SSS contribution rate increase happened in the wake of ongoing Senate hearings on the SS Reform Act of 2017.
Senator Richard Gordon, author of the bill, said the SS Charter Amendment will be a landmark bill which he will push for passage by end of this year.
“We strongly support Sen. Gordon’s mantra that we should work, save, and invest to prosper. Right now, SSS is the best and affordable savings mechanism for our workers,” Valdez said.
Based on the latest pension simulation by the SSS Actuarial and Risk Management Group, a member with an actual monthly salary of P30,000 at the time of his retirement with 45 credited years of service will have a basic monthly pension of P15,700, or only 52 percent of his last salary under the current P16,000 monthly salary credit (MSC) ceiling.
If the MSC ceiling will be adjusted to P30,000 by 2022, his estimated monthly pension will be at P29,300 or about 98 percent of his last salary at retirement.
The proposed bill to amend the 20-year old SS Charter is currently being deliberated at the committee level in the Senate and was listed as a priority bill of the Legislative-Executive Development Advisory Council (LEDAC) Executive Committee.
SSS eyes the charter amendment proposal as one of the long-term solutions that will make the pension fund viable and sustainable to further serve its future members and pensioners.
One of the major provisions of the proposal is the rationalization of the powers, duties and accountabilities of the Social Security Commission (SSC). With the rationalized powers, it will make it easier for the SSC to diversify SSS investments to generate and boost earnings of the pension fund, and to further improve the benefits being disbursed to its members.
The bill, when enacted into law, will also allow the Commission to condone penalties on delinquent contributions by employers and employee-members, and to determine appropriate monthly salary credit and contribution tables based on actuarial studies for the stability and viability of the pension fund.