A new act meant to protect and increase the Social Security System (SSS) funds has been approved and signed into law by President Rodrigo Duterte.
The Social Security System Rationalization Act (RA No. 11199), which is now signed into law, sets down implementing rules and regulations for a gradual increase of up to 15% in monthly contributions, 4% greater than the present 11%, achievable by the year 2025.
The act also permits a continuous adjustment on the
As per SSS President and Chief Executive Emmanuel F. Dooc, the newly signed law “will strengthen” the agency’s fund life, replenishing the SSS fund for the next six years.
The said increase in contributions shall transpire beginning this year, 2019.
Funds for Filipino retirees
RA No. 11199, mandates a 1%-point increase in the SSS contribution rate every two years until it reaches the maximum 15%.
At present, the SSS contribution rate is at 11%. This year, the rate of contribution will increase to 12%.
This year’s contribution rate increase will then be
That said, two-thirds of the contribution rate increase will be shouldered by the employers.
This 2019, SSS is targeting to collect P19 billion per month or at least P228 billion for the entire year.
Although the agency’s revenues have been growing
The SSS fund life was slashed by 10 years after
Compulsory SSS coverage for OFWs
Besides the mandated increase in contribution rate, the new SSS law will also make membership compulsory among Overseas Filipino workers (OFWs).
At present, only around 550,000 OFWs, whether land-based
It is also mandated under the amended SSS charter that a one-time, big-time amnesty among negligent employers can be availed without penalty within a six-month window period, wiping out significant amount of delinquent employer accounts.
Under the new law, the SSC will also have the power to administer future condonation programs.
Overhauling the SSS charter
RA 11199, which cancels Social Security Act of 1997, shall expand the duties and powers of the Social Security Commission (SSC) making them the highest policy-making body of the SSS, allowing them to collect higher contributions without the need of the President’s approval. This is in contrast with the current charter where only the chief executive can permit rate adjustments.
This will make the SSC the sole entity who will be managing critical funds, which in return will also require them big changes with the members of their board.
A “professionalized” SSS board is required, which will replace previous board members with professionals on the field of banking, insurance, or management.
This also gives the SSC more power, including the ability toreserve and invest its funds for it to grow.
The new powers provided by the law will also allow the SSS management to increase the salary credit and contributions of their employees considering that at present, it is only limited to P16,000. As per Senator Richard Gordon, one of the authors of the law, the amount of salary received by their employees “yields very little benefit.”
Under the new law, the Secretary of the Department of Finance will serve as the pension fund’s chair.
Sources: The Philippine Daily Inquirer, Rappler