Employers to shoulder hike in SSS premiums

President Arroyo has approved a one percent increase in the contribution rate of Social Security System’s premium effective Jan. 1, 2007 to ensure the agency’s financial health.

Under Social Security Commission’s (SSC) Resolution No. 382, employers will have to shoulder the increase in contributions of the SSS members.

Earlier, SSC chairman Thelmo Cunanan announced the 10 percent increase in the monthly pension being given to SSS members who have retired, died or have been rendered disabled.

The SSC is the agency that oversees the SSS and makes policy decisions.

In its resolution to increase the contribution rate, the SSC said: "There is a need to further strengthen the fund to ensure SSS financial health and service delivery capability and to enable it to achieve greater operational efficiency and expand its services."

"A one percentage point increase in contribution rate is necessary to achieve a funding equilibrium, wherein only employers, the self employed and voluntary members continue to contribute at the old rate," the resolution read.

The contribution rate will now be 10.4 percent from the 9.4 percent of the monthly salary credit, with the employer and the employee paying 7.07 percent and 3.33 percent, respectively.

The SSC said the last increase in contribution rate was in 2003, from 8.4 percent to 9.4 percent, shouldered only by employers.

The SSC noted the increase was necessary even as the life of the fund had improved up to year 2031 based on the latest actuarial variation.

Section 18 of Republic Act No. 8282 or the Social Security Act of 1997 empowers the SSC to fix the rate of contributions from time to time through rules and regulations, taking into consideration actuarial calculations and rate of benefits, subject to the approval of President Arroyo.