Contribution hike lifts SSS earnings by 441%
MANILA, Philippines — The Social Security System (SSS)’s net income soared by 441.34 percent to P15.32 billion in the first half from P2.83 billion in the same period last year, following the passage of the new SSS charter, which increased its members’ contribution.
In a statement, SSS president and chief executive officer Aurora Ignacio said the state pension fund’s total revenues for the January to June period rose by 20.9 percent to P115.53 billion from the P95.55 billion recorded in the same period last year.
This outpaced the 8.1 percent growth in the SSS’ expenditures, which reached P100.21 billion compared to P92.72 billion in the same period in 2018.
According to Ignacio, the SSS’ revenues in the first six months of the year grew as both contribution collections and investment income showed improvement during the period.
Contribution collection reached P99.08 billion, surpassing the P82 billion posted in the same period last year by 20.83 percent.
“This is primarily due to corporate collection efforts, as well as the increase in the contribution rate and in the maximum and minimum salary credit effective April 2019,” Ignacio said.
Ignacio said investment and other income also climbed to P16.45 billion in the first half, driven by stronger and more favorable market conditions.
President Duterte last February signed Republic Act 11199 or the Social Security Act of 2018.
Effective April 1 this year, the law raised the monthly contribution of members by one percentage point to 12 percent from the previous rate of 11 percent.
This will be further increased by one percentage point every two years, until it reaches 15 percent by 2025 . The law also provides the gradual adjustment of the minimum and maximum monthly salary credit.
Meanwhile, Ignacio said the bulk or P95.71 billion of the SSS’ total expenditures as of end-June was used as benefit payout for about 3.19 million members and pensioners.
“This is indeed the purpose of the pension fund–to provide meaningful benefits to its members and pensioners. In the first half of 2019 alone, the number of beneficiaries and claims have already posted significant growth since the implementation of new laws and policies of the administration,” Ignacio said, referring to the SS Act of 2018 and the Expanded Maternity Leave Law (EMLL).
Of the total benefit payouts, P55.7 billion went to retirement benefits, an 8.6 percent increase from P51.28 billion recorded in the same period last year.
This is followed by death benefit claims, which increased by 4.8 percent to P28.63 billion from P27.32 billion.
Moreover, Ignacio said the implementation of the EMLL in May this year pushed maternity benefits to P4.13 billion as of end-June, a 22.5 percent increase from the P3.37 billion released in the same period last year.
Disability and funeral benefit disbursements also increased to P3.59 billion and P2.14 billion, respectively, while sickness benefits rose to P1.51 billion.
Meanwhile, Ignacio said operation expenses--including personnel services, maintenance and other operating expenses--of the pension fund amounted to P4.51 billion, which is equivalent to 36.4 percent of the allowed charter limit.
Ignacio said the SSS’ financial condition improved at the end of the first semester, with total assets rising by six percent to P542.27 billion from last year’s P511.47 billion.