The Social Security System will implement a new contribution schedule and the Workers’ Investment and Savings Program (WISP) starting this month pursuant to the Social Security Act of 2018.
In a virtual press conference, SSS President and CEO Aurora C. Ignacio said the SSS’ contribution rate would be set at 13 percent from the 12 percent last 2020.
She added the minimum monthly salary credit (MSC) would be adjusted to P3,000 from the current P2,000, except for kasambahay and overseas Filipino workers members whose minimum MSC will respectively remain at P1,000 and P8,000, while the maximum MSC will be at P25,000 from P20,000.
“As to the contribution share of the employer and employee, the additional one percent will be equally divided, thus the employer share will be at 8.5 percent from eight percent, while the employee share will be at 4.5 percent from four percent. It applies to employed members, land-based OFW members in countries with bilateral labor agreements with the Philippines, and sea-based OFW members,” Ignacio said.
From 1980 to 2016, the contribution rate was increased only four times, while pensions were increased 22 times.
In 2017, a P1,000 additional monthly benefit was implemented for all pensioners without a corresponding adjustment in the contribution rate, which caused a reduction in the SSS fund life of 10 years.
“Thus, a year later, the Social Security Act of 2018 was enacted. The new law provided, among others, a schedule of increases in contribution rate as well as the minimum and maximum MSCs up to 2025. Upon full implementation, the reforms under it will offset the adverse financial impact of the additional monthly benefit granted in 2017,” Ignacio said.
During the press conference, the second tranche of the P1,000 pension increase was also discussed.
Ignacio said the SSS understands its pensioners’ plight and recognizes the good intention of granting the second tranche of the P1,000 additional monthly benefit. However, to grant such additional benefit allowances, the actuarial soundness of the SSS must be guaranteed through thorough studies, especially now that there is a pandemic and the collection of SSS contributions experienced a significant decline.
“We must ensure that the current and future generation of members, pensioners, and their beneficiaries has access to social security protection through the programs that the SSS offers,” Ignacio said.
The SSS also presented the features of the WISP, a safe, convenient, principal-protected, and tax-free individual retirement savings plan, which will serve to augment member savings from the regular program.
Since the regular program puts a cap of P20,000 MSC in calculating benefits, the WISP will cover the contributions more than the P20,000 MSC up to the prescribed maximum MSC.
Coverage under the WISP will be automatic to all private-sector employees, self-employed individuals, OFW, and voluntary members who have no final claim in the regular SSS program, have contributions in the regular SSS program, and have an MSC that exceeds P20,000.
Contributions in WISP shall be paid together with contributions in the regular SSS program.
“It allows faster accumulation of a worker’s savings because of the employer share in the contribution. Moreover, WISP contributions will be invested following the principles of safety, high yield, and liquidity, and as provided under the SS Act of 2018, which will yield additional pension income for contributing members,” Ignacio said.
Earnings realized from them will be distributed proportionately based on the member’s contribution.
The total accumulated account value (AV) of the member under the WISP will be the basis of his/her additional benefits, which will be given at the same time during his/her retirement, total disability, and/or death.
Benefits will be given in annuity or lump sum, depending on the manner of payment of his/her benefit under the regular SSS program.
The annuity will be given in the form of a fixed amount monthly pension, to be paid until the member’s AV is fully settled, covering at least 15 years.
Upon the death of a WISP pensioner, any balance in the accumulated AV will be paid to his/her beneficiary in lump sum. – Press release
April 30, 2024
