The Social Security System said its new contribution schedule and Workers’ Investment and Saving Program (WISP) will be implemented starting next month, pursuant to Republic Act 11199, or the Social Security Act of 2018.
In a virtual press conference, SSS president and chief executive officer, Aurora Ignacio, said that the contribution rate would be set at 13 percent from the current 12 percent.
She added that the minimum monthly salary credit (MSC) would be adjusted to P3,000 from the current P2,000, except for kasambahay and OFW members whose minimum MSC will respectively remain at P1,000 and P8,000, while the maximum MSC will be at P25,000 from P20,000, a press release from SSS said.
“As to the contribution share of the employer and employee, the additional one percent will be equally divided, thus the employer share will be at 8.5 percent from 8 percent, while the employee share will be at 4.5 percent from 4 percent. It applies to employed members, land-based OFW members in countries with bilateral labor agreements with the Philippines, and sea-based OFW members,” Ignacio said.
She added that from 1980 to 2016, the contribution rate was increased only four times, while pensions were increased 22 times.
In 2017, a P1,000 additional monthly benefit was implemented for all pensioners without a corresponding adjustment in the contribution rate, that caused a reduction in the SSS fund life of 10 years, the press release said.
In 2018, the Social Security Act was enacted. The new law provides, among others, a schedule of increases in contribution rate, and the minimum and maximum MSCs up to 2025. Upon full implementation, the reforms under it will offset the adverse financial impact of the additional monthly benefit granted in 2017, Ignacio said.
Ignacio also said that SSS understands its pensioners’ plight and recognizes the good intention of granting the second tranche of the P1,000 additional monthly benefit. However, to grant such additional benefit allowances, the actuarial soundness of the SSS must be guaranteed through thorough studies, especially now that there is a pandemic and the collection of contributions experienced a significant decline.
“We must ensure that our current and future generations of members, pensioners, and their beneficiaries have access to social security protection through the programs that the SSS offers,” Ignacio said.
The SSS also presented the features of the WISP, a safe, convenient, principal-protected, and tax-free individual retirement savings plan, that will serve to augment member savings from the regular program.
Since the regular program puts a cap of P20,000 MSC in calculating benefits, the WISP will cover the contributions more than the P20,000 MSC up to the prescribed maximum MSC.
Coverage under the WISP will be automatic to all private-sector employees, self-employed individuals, OFWs, and voluntary members who have no final claim in the regular SSS program, have contributions in the regular SSS program, and have an MSC that exceeds P20,000.
Contributions in WISP shall be paid together with contributions in the regular SSS program.
Earnings realized from them will be distributed proportionately based on the member’s contribution.
The total accumulated account value (AV) of the member under the WISP will be the basis of his/her additional benefits, which will be given at the same time during his/her retirement, total disability, and/or death benefits.
Benefits will be given in annuity or lump sum, depending on the manner of payment of his/her benefit under the regular SSS program.
The annuity will be given through a fixed amount monthly pension to be paid until the member’s AV is fully settled, covering at least 15 years. Upon the death of a WISP pensioner, any remaining balance in the accumulated AV will be paid to his/her beneficiary in lump sum, the press release added.*