THE Social Security System has begun with the scheduled implementation of hike from members’ contribution in a bid to protect the actuarial life of the fund.
The state-run pension fund said that the contribution will now be at 14 percent, up from last year’s 13 percent.
The hike was based on the provisions of Republic Act of RA 11199, which mandated higher contributions to ensure the financial viability of the fund.
In a statement, the SSS said that under the new contribution rate, employers will shoulder the one percent increase, which means their contribution will now be at 9.5 percent while the remaining 4.5 percent will be deducted from the employee.
The decision to push with the contribution hike amid the call for the SSS to defer the contribution increase that was originally set to take effect at the onset of the new year.
SSS president and CEO Roland Macasaet stressed that the increase will immediately benefit the country’s 13 million workers and will ensure the viability of the SSS fund, which is designed to provide them with social security protection.
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.
Increasing the contribution rate is among the reforms being implemented by SSS to lengthen its fund life and to ensure that the system can provide the benefits for members and pensioners.
Business groups earlier urged the SSS to suspend the increase in SSS contributions citing inflation.