In a press briefing, SSS senior vice president and chief actuary Edgar Cruz said Republic Act 11210 or the “105-Day Expanded Maternity Leave Law” may trim the state fund’s actuarial life by one year to 2044 with the SSS forced to absorb the additional costs arising from the law’s implementation.
KJ Rosales/File
Expanded maternity law to cut SSS fund life
Mary Grace Padin (The Philippine Star) - March 26, 2019 - 12:00am

MANILA, Philippines — The Expanded Maternity Leave Law may shorten the Social Security System’s fund life by one year without any source of funding to cover the additional maternity benefits under the law, a senior SSS official said yesterday.

In a press briefing, SSS senior vice president and chief actuary Edgar Cruz said Republic Act 11210 or the “105-Day Expanded Maternity Leave Law” may trim the state fund’s actuarial life by one year to 2044 with the SSS forced to absorb the additional costs arising from the law’s implementation.

“The expanded maternity benefits did not come with funding under the law. So without such funding, if the Social Security fund will absorb the cost, it would set back our fund life by one year…So we’re now at 2044,” Cruz said.

Earlier estimates showed that the SSS’ fund life was extended to 2045 following the enactment of Republic Act 11199 or the Social Security Act of 2018. However, Cruz said this would again be cut to 2044 with the Expanded Maternity Leave Law.

The law extends the paid maternity leave to 105 days from the current 60 days, with an option to extend for another 30 days without pay. It also grants solo parent an additional 15 days of paid maternity leave.

According to SSS, the bill was initially passed by Congress with funding from the General Appropriations Act, but this provision was later on scrapped by the bicameral committee.

SSS estimates showed that the law is seen to increase the state fund’s maternity benefit disbursements by P7.5 billion a year.

To cover the additional disbursements under the law, initial actuarial studies of the SSS showed that the contribution rate of SSS members must be further increased by 0.5 percentage point.

However, SSS acting president Aurora Ignacio said the state fund may be bound by what is written in the Social Security Act, which provides a calendar of contribution hikes in the next six years.

The law provides a one-percentage point increase in the contribution rate of SSS members every two years starting 2019 (from the current 11 percent) until it reaches 15 percent in 2025.

“Right now, we are limited by what is written in the law and what we hope for, after the number of years that we will be allowed to give the one percent every year, is to increase to cover that (maternity benefit),” she said. “For now, we will try to cover it with what we have.”

Ignacio said the SSS is planning to conduct an actuarial study to determine until when the state fund would be able to cover the additional benefits.

According to SSS chief legal counsel Voltaire Agas, the SSS is targeting to issue the implementing rules and regulations of the Expanded Maternity Benefit Law for the private sector before May 1, or Labor Day.

Meanwhile, Agas said the SSS is also targeting to begin the implementation of the mandatory coverage of overseas Filipino workers (OFW) by June this year.

Joy Villacorta from the SSS International Operations Group said the SSS expects to collect P13 billion from the mandatory OFW coverage in the next two years.

The mandatory OFW coverage is part of RA 11199 of the Social Security Act. The law provides that new hires who plan to work overseas must have at least one month of contribution, while returning OFWs must have three months.

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