Senate ratifies bicam report overhauling SSS charter, increasing monthly contribution

The Senate adopted and ratified Wednesday the bicameral conference committee report on the bill overhauling the charter of the Social Security System  (SSS) and increasing the monthly contribution of members from the current 11 percent of one's salary to 12 percent in the next two years.

The contribution rate will gradually increase to reach 15 percent by 2025, according to the proposed law.

By increasing the contributions, the pension agency is expected to extend its fund life by at least six years.

The reconciled bill provides for a compulsory coverage of both land-based and sea-based overseas Filipino workers to the SSS, "provided that they are not over 60 years of age."

Senator Richard Gordon said although at present there are only 500,000 OFW workers who are covered by the SSS, the bill may help expand that number to two-and-a-half million members.

The bill also raises from P16,000 to P20,000 the maximum salary credit that may be availed by members.

The maximum salary credit will be pegged at P35,000.

The bill also contains an unemployment insurance provision which will give jobless SSS members “involuntary separation benefits” for two months “with the amount for each month equivalent to half of the average monthly salary credit.”

It states the “unemployment insurance or involuntary separation benefits” can be received by a member who is not over 60 years old and who has paid 36 months of contributions.

Twelve months of these contributions should be made within the 18-month period immediately before the involuntary loss of a job.

The measure mandates that SSS board members should be a lawyer or involved in management or banking or insurance "so that their qualifications will be fit to the requirements of the SSS."

The Secretary of Finance was also named as the ex-officio chairman of the SSS Commission.

The bill also gives the SSS Commission the power to determine the salary credit and monthly contributions of members, which would now allow the commission to increase contributions "depending on the actuarial survey."

The other important amendments to the SSS charter are:

• The scheme in which contributions on top of the regular social security pension fund shall accrue to a provident fund;
• The option to voluntarily contribute to a provident fund, which shall be tax-free;
• Allowing kasambahays whose actual monthly income is lower than the minimum salary credit to contribute based on their actual monthly salary;
• Authorizing compromises or releases in whole or in part, any interest, penalty or any civil liability to SSS in connection with the investments authorized under the SSS Charter;
• Permitting the condonation of penalties;
• Liberalizing the investment portfolio by allowing it to invest in government-led infrastructure projects; and
• Amending the investment portfolio by removing certain or all of the caps or limits on a menu of permissible investments.

The ratified bill will be sent to Malacanang for the President's signature. —LDF, GMA News