President Rodrigo Duterte approved on Tuesday a P1,000 increase in pension, along with a corresponding hike in premiums for members. The retired members of the Social Security System (SSS) will start receiving the additional fund in their monthly pension beginning this month.
SSS pension hike approved
Malacañang announced on Tuesday, Duterte’s approval of the P1,000 hike. However, the pension raise was made on the condition that the SSS would raise its monthly premiums to 1.5 percent for active members. This would increase their monthly contributions to 12.5 percent of their monthly salary credit while the maximum monthly salary credit will also increase to P20,000 from the current P16,000. The higher monthly premiums will be implemented starting in May.
In a press briefing, presidential spokesman Ernesto Abella justified the decision, citing the need for the state-run pension fund to exercise fiscal responsibility to ensure its economic sustainability. He also noted the funds for the increase would be covered by current contributions and the investment reserve fund.
Additional pension hike in 2022
According to SSS Chairman Amado Valdez, Duterte also approved another P1,000 pension hike in 2022. However, he cautioned that the contribution rate could also be increased annually until it reaches the target of 17 percent from the current rate over six years.
He added that the SSS is also looking into internal reforms to improve their earnings. He noted that if it will come to fruition, the increase can be introduced as early as 2019. The pension hike defied the earlier proposals of the presidential economic managers to grant the increase only after the approval of the tax reform law that would make it easier to increase SSS contributions.
Abella assured the SSS fund life will continue until 2040 even with the current P1,000 increase, once the hike in the contribution rate is implemented. The officials vowed to improve SSS investments while going after erring employers who do not submit contributions.
What do you think of the approval of the P1,000 pension hike? What about the corresponding increase in SSS members’ contribution? Let us know in the comments section below.