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SSS: Contribution hike, expanded maternity leave covered by separate laws

09:02 AM April 15, 2019

This refers to an article written by Jovic Yee and Karl R. Ocampo titled “Don’t look at new maternity law as a burden, Ecop urged” (3/26/19).

Allow us please to clarify the following statements in the article:

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1) “This (referring to the expanded maternity leave) would cost the SSS an additional P7.5 billion annually, despite a provision in the law gradually raising members’ monthly contributions to 15 percent, from the current 11 percent.”

The increase in SSS contribution rate and the expanded maternity leave are covered by two separate laws. The
gradual increases in monthly contributions from 11 to 12 percent this year to
15 percent by 2025 is a provision in Republic Act No. 11199 or the Social Security Act of 2018, which took effect on March 5, 2019. Meanwhile, the expanded maternity leave is a separate law under Republic Act No. 11210, which took effect on March 18, 2019.

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Since the effectivity of RA 11199 was a few weeks earlier than RA 11210, the contribution rate increase under RA 11199 obviously does not cover the estimated additional P7.5 billion annual disbursement in maternity benefits under RA 11210. This news item connotes otherwise.

2) “Beginning in April this year, SSS would raise its contribution rate every other year by 1.5 to 1.6 percentage points, which would give the SSS an additional P31 billion in collections.”

Based on our transcript of the press conference held last Monday, there was no SSS statement on a 1.5 to 1.6 percentage points contribution rate increase. Instead, the SSS panelists cited the gradual contribution increases under RA 11199.

3. “Edgar Cruz, senior vice president for actuarial and risk management of the SSS, said that with the P1,000 additional benefit for pensioners and the extra maternity leave benefits, the increase in contribution rate was still not enough to offset the agency’s costs.”

Again, based on our transcript of the press briefing, Cruz said: “The scheduled increase in contribution rates under the new charter was BARELY ENOUGH to cover the P1,000 pension benefit increase granted in January 2017.” He did not mention the expanded maternity benefit.

Also, we would like to clarify that the scheduled contribution rate hikes under the new charter are meant to cover past additional benefit payouts to SSS members due to the 2017 P1,000 additional benefit paid to pensioners, and not “agency costs” as stated in the article. Agency costs pertain to personnel services and maintenance and other operating expenses, and are minimal compared to benefit payouts.

We strongly appeal for accuracy in your reports because this might cause undue worry among our stakeholders.

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MA. LUISA P. SEBASTIAN, Vice President, Public Affairs and Special Events Division, Social Security System

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