SC upholds 2014 SSS premium hike

MANILA, Philippines — The Supreme Court (SC) has upheld the 0.6-percent hike in premium contributions of Social Security System (SSS) members as implemented by the government in 2014.

In a 37-page decision, the high court denied for lack of merit the petition filed by militant labor groups Kilusang Mayo Uno and Anakpawis, which sought to void the measure, approved by the Social Security Commission (SSC) through Resolution No. 262-2013, that increased the monthly SSS contributions of workers from 10.4 percent to 11 percent.

The Court dismissed the petition as a collateral attack to the validity of authority of the SSC to fix the contribution rate under Republic Act 8282 or Social Security Act.

It held that the law is complete in its terms and also contains a sufficient standard for the SSC to fix the monthly contribution rate and the minimum and maximum monthly salary credits.

“To question the use of ‘actual calculations’ as [a] factor for fixing rates is to question the policy or wisdom of the legislature, which is a co-equal branch of the government,” read the ruling promulgated last April 2 but released only yesterday.

The Court further ruled that the measure was a valid exercise of police power necessary to observe the constitutional mandate of promoting social justice under the SSS law.

“Given the past increases since the inception of the law, the contribution rate increase of 0.6 percent applied to the corresponding monthly salary credit does not scream of unreasonableness or injustice,” it stressed.

Lastly, the SC explained that the SSS and SSC were only complying with their duties under RA 8282 and that there was no showing they went beyond their powers under the law amounting to lack of or in excess of their jurisdiction.

In its earlier answer, the SSS told the Court that the premium hike was the best option to reduce the pension fund’s unfunded liabilities amounting to about P1.1 trillion in 2013.

The increase reportedly expanded the SSS fund’s asset base by P294 billion.    

The SSS explained that without the increase in contributions, the life of the pension fund would last only until 2039 and that members will need to depend on the government to cover payment of benefits.