Philippine Daily Inquirer
First Posted 04:05:00 04/09/2011
Filed Under: Insurance, Government offices & agencies
Most Read
MANILA, Philippines—The proposed increase in social security contributions is the first step to make pension funds last “forever,” according to Social Security System chief executive Emilio de Quiros Jr.
De Quiros said in a statement that an increase in contribution of 0.6 percentage point to 11 percent of a member’s salary would help the SSS restore fund perpetuity—a status that was last attained in 1980.
Based on the last actuarial valuation done in 2007, SSS funds would only last until 2039. The planned hike would merely extend fund life to 2046, although it would also increase the amount of benefits members receive, he explained.
De Quiros earlier said the proposed increase is needed to address members’ clamor for “more meaningful benefits.”
The last time the contribution rate was increased was in 2007.
Starting 2003, the rate stood at 9.4 percent.
“We are taking small steps towards our goal of having a perpetual fund, or a fund life of at least 75 years,” De Quiros said. “We need to implement reforms, but we don’t want a drastic one-time increase in contribution ... We prefer to do it gradually.”
De Quiros said that from the time the SSS was established in 1957 until September 2010, benefit payments reached P734 billion, exceeding contribution collections of P732 billion.
“Were it not for cumulated investment income of about P350 billion, the fund would have long been depleted,” he said.
The Social Security Commission, the SSS governing board, approved in principle the proposed increase in the contribution rate.
The SSC also agreed to increase the maximum monthly salary credit—the ceiling that serves as basis for contribution payments—to P20,000 from P15,000. Ronnel W. Domingo
--
---------------------------------------------
CARLOS ANI - SEEDFINANCE Corporation - http://www.seedfinance.net
Email: carlosani@seedfinance.net
Landline: +63495010127 Cellphone: +639152919580
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com http://phildevfinance.wordpress.com
CONSULTING - http://www.carlosani.com
My Clippings - http://www.myclipps.posterous.com
------------------------------------------
---------------------------------------------
CARLOS ANI - SEEDFINANCE Corporation - http://www.seedfinance.net
Email: carlosani@seedfinance.net
Landline: +63495010127 Cellphone: +639152919580
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com http://phildevfinance.wordpress.com
CONSULTING - http://www.carlosani.com
My Clippings - http://www.myclipps.posterous.com
------------------------------------------
