Changes in SSS: Increase in Contributions and Implementation of the Workers’ Investment Savings Program

On 22 December 2020, the Social Security Commission issued the Revised Schedule of SSS Contributions (SSS Circulars Nos. 2020-033-b, 034-b, and 035-b), which became effective in January 2021. Under these Circulars, the SSS contribution rate increased to 13% from the previous 12% with the employer’s contribution rate increased from 8% to 8.5%, and the employee’s contribution rate from 4% to 4.5%.

The minimum monthly salary credit was also raised to Php 3,000 from Php 2,000, while the maximum monthly salary credit was set at Php 25,000 from Php 20,000. As an exception, SSS Circulars No. 2020-036 and 2020-039 provide that Kasambahay and OFW members’ minimum monthly salary credit remain at Php1,000 and Php8,000, respectively.

One of the factors that brought about this change was the implementation of the Mandatory Provident Fund (“MPF”) Program, also called the Workers’ Investment Savings Program (“WISP”) pursuant to Section 4 (a) of RA No. 11199 (Social Security Act of 2018), which mandated the Social Security Commission to establish and maintain a Provident Fund for SSS members with monthly salary credit in excess of Php 20,000.00.

On 24 November 2020, the Social Security Commission issued SSS Circular No. 2020-032, implementing the Mandatory Provident Fund (MPF) Program. This covers all private sector employees, self-employed individuals, overseas Filipino workers, and voluntary members who have:

1. No final claim in the Regular SSS Program[1]
2. Contributions in the Regular SSS Program
3. A monthly salary credit that exceeds Php 20,000

Starting January 2021, the MPF Program shall automatically apply to all covered SSS members. No further enrollment by the employer or employee is necessary for the application of the MPF Program.

The amount of MPF Contributions shall be the prescribed contribution rate multiplied by the monthly salary credit in excess of Php 20,000 up to the prescribed maximum of Php 25,000. These contributions shall always be paid together with contributions under the regular SSS Program. According to SSS Circular No. 2020-032-b, a penalty rate of 2% per month for non-payment shall apply to the total contributions including MPF. The SSS further emphasized that withdrawal of these contributions is not allowed.

Under SSS Circular No. 2020-032, receipt of benefits under the MPF program are subject to the following guidelines:

1. The basis for MPF benefits is the total accumulated account value of the member at the time of the approval of the claim for retirement, total disability or death.
2. The MPF benefit shall be automatically processed when the member (or his/her beneficiaries) files for retirement, total disability or death benefit claim under the Regular SSS Program.
3. The MPF benefit shall be paid together with the SSS regular benefit. Initial disbursement of MPF benefits shall coincide with the Regular SSS Program, including when the member opts to receive the first 18 months’ pension in advance or has accrued pension.
4. The MPF benefit shall be given either in lump sum or annuity depending on whether the members’ regular SSS pension is in lump sum or annuity.
5. The annuity shall be given in the form of a fixed amount of monthly pension equal to the member’s total accumulated account value divided by 180. The pension will be paid until the member’s accumulated account value is fully settled, covering at least 15 years.
6. Upon the death of the MPF pensioner, any remaining balance in the accumulated account value will be paid to his/ her beneficiary in lump sum.

In essence, under the WISP or MPF Program, qualified SSS members shall receive additional retirement, total disability and death benefits, on top of their regular SSS benefits.

[1] “Final Benefit Claim” is a settled claim by an SSS member for retirement, total disability or death benefit in the Regular SSS Program (SSS Circular No. 2020-032).

To read the full text of the issuances, click the following:

SSS Circular Nos. 2020-032, 2020-032-b, 2020-033-b, 2020-034-b, 2020-035-b.