The Social Security System (SSS) said
today it has started implementing the provisions
of the Republic Act of RA
11199 or the Social Security Act of 2018, which
mandated a contribution
hike to ensure the financial
viability of the state pension fund for private sector
workers.
SSS President
and Chief Executive Officer Rolando Ledesma Macasaet said the
law-mandated contribution
increase would translate
to immediate benefits to
the country’s 13 million
workers and will ensure
the viability of the SSS
fund designed to provide
them with social security
protection.
Enacted on February 7, 2019 by Congress, the Social Security
Act of 2018 rationalized
and expanded the powers and duties of the Social Security Commission
(SSC) to ensure the longterm viability of the SSS.
Under the law, SSS should
gradually increase the
contribution rate by one
percentage point every
two years until it reaches
15 percent by 2025.
In accordance
with the schedule provided under RA 11199, the
contribution rate increased
to 14 percent from 13 percent in the previous year.
Under the new contribution rate, employers will
shoulder the one percent
increase, which means
their contribution will now
be at 9.5 percent. The remaining 4.5 percent will
be deducted from the employee.
Finance Secretary and SSC Chairperson
Benjamin E. Diokno has
expressed his support for
the new contribution rate
saying, “it is the right thing
to do for the institution and
its members.”
Macasaet said
the implementation of the
contribution hike would
eventually redound in a
system that would serve
workers better. “The contribution hike will benefit
the workers with the SSS
being able to provide a
financially viable social
protection system to Filipino workers and their
families,” Macasaet said.
“It will not be a burden
on workers but will be
shouldered by employers. Workers earning less
than P25,000 per month,
who comprise 78 percent
of SSS-paying employee
members, will not be affected,” he added.
Macasaet served
as President and General
Manager of the Government Service Insurance
System (GSIS) during the
Duterte administration and
was appointed by President Marcos to head the
SSS last January 5 to replace former SSS PCEO
Michael Regino.
At the same time,
Macasaet noted that under existing tax laws, employers would be allowed
to deduct their share of the
contribution hike from their
taxable income. “This underscores a whole-of-nation approach in securing
the future of our workers
with the Philippine government also contributing
in the form of tax relief to
employers,” Macasaet explained.
The SSS is being
urged by employer groups,
such as the Philippine
Chamber of Commmerce
and Industry (PCCI), the Employers Confederation
of the Philippines (ECOP),
and the Philippine Exporters Confederation Inc.
(PECI), to suspend the implementation of the Social
Security Act of 2018 that
mandates the one percent
increase in SSS contributions starting this month.
The request of
the employers’ groups
was opposed by SSS officials as postponing the
measure would reduce the
actuarial life of the fund.
The SSS said they gave
due consideration to the
plight of small employers
in past contribution hikes,
but ultimately had to act in
favor of workers’ interests
and the fund’s long-term
solvency.
In his statement,
Macasaet clarified that
employees would not be
required to shoulder the
addition financial burden
that goes with the contribution hike.
“The contribution hike will not be paid
by the lowly worker but
by financially-stable employers who can afford
such adjustments. I am
appealing to the PCCI, the
ECOP, and the PECI, who
we consider our valuable
partners in our mission to
provide social protection
to our workers, to treat
the contribution hike not
as another operational
expense but as a noble
investment to ensure the
viability of the workers’
pension fund,” Macasaet
said.
“We appeal to
our friends in big business
to help us provide meaningful protection to the
members of the working
class and their families
against the hazards of disability, sickness, maternity,
old age, death, and other
contingencies resulting in
loss of income or financial burden,” he added. “A
socially protected working
class is our best recipe for
continued industrial peace
in our country.” PR
