State-run Social Security System (SSS) on Thursday said 13 more years will be added to its fund life following the recent enactment of Republic Act 11199, otherwise known as the Social Security Act of 2018.
SSS President and Chief Executive Officer Emmanuel F. Dooc said from the current fund life of up to 2032, it is expected to be extended until 2045, on the back of the implementation of the contribution increase and adjustment in minimum and maximum salary credits under the newly-signed law.
RA 11199 aims to strengthen the pension fund through the implementation of the gradual increase on monthly contributions from the current 11 percent to an addition of 1 percentage point starting on the year of implementation until it reaches 15 percent in 2025, and the gradual adjustment of the minimum and maximum monthly salary credit (MSC).
Based on SSS Actuarial and Risk Management Group’s study, there will be an additional P31 billion in contribution collections of the pension fund in 2019 if the 12 percent contribution rate with adjustments in the minimum and maximum MSC will be implemented.
SSS' fund life in 2016 was 26 years or until 2042.This was slashed by 10 years when the P1,000 additional benefit for pensioners was implemented in 2017. SSS shelled out an extra P 33.26 billion in 2017 for the implementation of the P1,000 additional benefit for more than 2.3 million qualified pensioners.
"We would like to appeal to our members to see these reforms as additional savings and not as a burden for them. We would like to ensure that the SSS would have enough funds for their short-term and immediate financial needs during times of contingencies," Dooc said.
"Along with these reforms, of course, benefits and privileges for our members will also improve. One example, assuming a member who has a monthly salary of P20,000 and has paid 12 contributions in the 12-month period before the semester of contingency, his/her sickness benefit will increase to P600 per day from the current P480 per day," Dooc said.
For the same monthly salary of P20,000, maternity benefit is also expected to increase to P40,000 for non-caesarean from the current P32,000. The average basic monthly pension is also expected to increase to P8,000 from the current average of P6,400.
"This law also provides unemployment insurance for those who will be involuntarily displaced from employment. Under the law, displaced workers will get financial assistance from SSS in the form of cash equivalent to half of their average monthly salary credit for two months," Dooc said.
At present, SSS members are covered with sickness, maternity, disability, retirement, funeral, and death/survivor benefits.
Likewise, the law provides protection for the growing number of Filipinos working abroad as it made social security coverage of Overseas Filipino Workers (OFWs) mandatory.
"Filipinos who work outside the country are more prone to risks as they are exposed to unfamiliar environment while they are trying to earn for their family. Our goal here is to ensure that all of OFWs will be protected under the SSS," Dooc said.
Gordon, the principal author, and sponsor of the law, said the new law emphasizes the value of work, save, invest and prosper among its members.
"The bill does not promise an abundance of wealth but to secure people in case they would encounter unwanted situations in their lives through a lifeline that they themselves created through their contribution," Gordon said.
The new law now awaits for the Implementing Rules and Regulations after its publication on the Official Gazette or any newspaper of general circulation.