Will 2021 be better? Not for SSS members and their employers

January 1, 2021 - 2:39 PM
Philippines holidays 2020
Passengers wearing face masks and face shields for protection against the coronavirus disease (COVID-19) queue for bus rides going to provinces amid the holiday season, at the Parañaque Integrated Terminal Exchange, in Paranaque City, Metro Manila, Philippines, Dec. 29, 2020. (Reuters/Eloisa Lopez)

The scheduled Social Security System premium hike will be rolled out at the start of the new year, adding to the many burdens of companies and individual members in a pandemic.

The mandatory contributions will increase from 12% to 13% under Republic Act 11199 or the Social Security Act of 2018. Though it doesn’t sound like much of a climb, workers have to pay P200 more if their salary is at least P24,750 a month.

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They and others earning above P20,000 also have to add an extra contribution of up to P650 for the provident fund, which is like a pension fund but gives out both monthly pension pay and a lump sum upon retirement.

The good: Long-term

The new fund will be invested in low-risk government securities and bluechip equities.

This investment trust will not only provide members with regular SSS benefits but also retirement, disability and death benefits.

The bad: Short-term

Besides the fresh cut from employees’ wages, employers also share in the contributions, as they pay 35% of the monthly premium. And this comes at a time when many small and medium companies are still reeling from the effects of lockdowns and ongoing outbreaks.

But the SSS and the Department of Finance have refused to defer the increase for January, arguing it is a matter set in law and will endanger the soundness of the fund in the coming decades.

A group of employers hoped that President Duterte would consider deferring the scheduled hike, after all many things have been deferred due to the pandemic.

“Sana kahit ‘yun man lang, mapagbigyan. Tutal, deferment lang naman ang hinihingi namin eh. Hindi naman magiging masyadong kritical sa SSS ‘yun,” Employers Confederation of the Philippines chief Sergio Ortiz-Luis Jr. said in a television interview.

Employes, too, are similarly unhappy with the timing of the new burden for a future benefit.

Sen. Richard Gordon, chair of the upper house’s government corporation committee, asked the SSS to propose a plan on how to defer the premium hike without affecting the fund’s sustainability.