Finance Secretary Carlos G. Dominguez III encouraged the Social Security System (SSS) to intensify its campaign to inform members and the rest of the public on the value of SSS coverage as well as the various aspects of the pension fund's operations.
Dominguez, in his keynote address during the agency's 59th anniversary celebration, advised SSS to "constantly educate the public about the advantages of coverage, the wisdom of the institution's investments, and the need to adjust contributions from time to time to take inflation into account."
"The public is always inclined to want to pay less and derive more benefits. Public resistance to raising contributions has been a factor that at several instances in the past actually shortened the actuarial life of the fund," he noted.
Within the past few years, SSS management sought to gradually increase the previous 10.4 percent contribution rate to 15 percent, and the former P15,000 maximum monthly salary credit (MSC), which represents the highest income covered by SSS premiums, to P20,000.
Following extensive consultation meetings initiated by SSS with its stakeholders in the labor and employer sectors, the SSS contribution rate edged up by 0.6 percent to the current 11 percent, while the maximum MSC increased to P16,000 effective January 2014.
Dominguez also drew attention to the disparities in the contribution and benefit schemes between the SSS and its counterpart in the public sector, the Government Service Insurance System (GSIS).
"The (SSS) contributions cannot compare with the contributions of the GSIS and that's why the benefits are not as good as those in the GSIS. This is something I think we should all sit down and consider how it can be improved," he said.
Under the present system, SSS members contribute 11 percent applied to a maximum monthly income of P16,000. In contrast, GSIS members pay at a much higher 21 percent contribution rate that applies to the worker's entire monthly salary since it has no restriction similar to SSS' maximum MSC.
To illustrate, given a monthly income of P50,000, the amount of contribution per month would be P1,760 under the SSS. Meanwhile, a GSIS member with the same income would remit P10,500 per month, nearly six times more compared with the amount of SSS contribution.
In terms of sharing, employers remit 67 percent of the total monthly SSS contribution while the remaining 33 percent is deducted from the employee's salary. Under the GSIS, the ratio of the employer and the employee share of the total contribution is 57 percent and 43 percent, respectively.
Dominguez stressed the need for SSS to consider the suitability of its benefits, echoing the declaration of policy under the Social Security Act which stated the mission of SSS to provide a "sound and viable, tax-exempt social security system suitable to the needs of the people."
"Always remember that the members, those who contribute from their hard-earned pay, own the fund," he emphasized, adding that "the members' voices should always matter in considering the level of benefits that SSS provides."
The 59th SSS anniversary program also featured the Balikat ng Bayan Awards, which is held every year to recognize the contributions of top-performing employers, financial institutions and other SSS partners in extending social protection to Filipino workers.
The SSS started its operations on September 1, 1957, following the enactment of Republic Act 1792 which amended the original Social Security Act in the same year.
Source: Philippine Information Agency