1. Module 2: SOCIAL SECURITY CONCEPTS REFRESHER COURSE ON FRONTLINE SERVICES 2. TOPICS Basic Social Security Concepts Branches of Social Security Financing / Funding Schemes Actuarial Valuation Administering / Managing Social Security Trends and Best Practices in Social Security 3. Basic Social Security Concepts 4. BASIC SOCIAL SECURITY CONCEPTS Definition of social security Objectives of social security Basic functions of social security Characteristics of social security programs Individual equity versus social adequacy Principles of a social insurance system Five pillars of old-age income security 5. DEFINITION OF SOCIAL SECURITY Social Security the protection that the society provides for its members through a series of public measures against the economic and social distress that otherwise would be caused by the stoppage, or substantial reduction, of earnings resulting from sickness, maternity, employment injury, unemployment, invalidity, old age, and death; the provision of medical care; and the provision of subsidies for families with children. Source: (ISSA/ILO) 6. OBJECTIVES OF SOCIAL SECURITY To provide compensation for income loss To promote health and prevent illness To create living conditions that will satisfy general needs of population and special needs of elderly, disabled and children To redistribute income 7. TWO BASIC FUNCTIONS OF SOCIAL PROTECTION SYSTEM A safety net function: ensures that each member of the society who is facing destitution is provided with a minimum level of cash income, health and social services which allow the member to lead a socially meaningful life; An income maintenance function: permits economically active members of the society to build up entitlements to maintain decent standard of living during periods of contingencies 8. CHARACTERISTICS OF THE SOCIAL SECURITY PROGRAMS Established by government law Generally provide individuals with cash payments that replace at least part of the income loss Principal methods of providing social security protection: social insurance employers liability scheme social assistance benefits funded from general revenues provident funds 9. METHODS OF SOCIAL SECURITYMETHODS OF SOCIAL SECURITY PROTECTIONPROTECTION Benefits prescribed in law Benefits prescribed in law Based on contribution history from employment Redistributiv e Financed from taxation Based on residence Flat-rate benefits Individual employer provision Financed directly by employer Financed from taxation Based on need Discretionary benefits Redistributive Financed by contributions Based on employment Contributions prescribed in law Individual accounts 10. METHODS OF SOCIAL SECURITYMETHODS OF SOCIAL SECURITY PROTECTIONPROTECTION Benefits prescribed in law Benefits prescribed in law Based on contribution history from employment Redistributiv e Financed from taxation Based on residence Flat-rate benefits Individual employer provision Financed directly by employer Financed from taxation Based on need Discretionary benefits Redistributive Financed by contributions Based on employment Contributions prescribed in law Individual accounts : PHILIPPINES: PHILIPPINES SSS GSIS PhilHealth (Medical Benefits) NONE Employer- Provided Plans CCT Program (DSWD) Pag-IBIG (Focus on Housing Needs) 11. PRINCIPLES OF A SOCIAL INSURANCE SYSTEM Must be generally compulsory Must be nearly universal in coverage Benefits should be related to earnings Provides only a minimum floor of income protection against various risks covered Emphasizes the payment of benefits based on social adequacy rather than individual equity 12. INDIVIDUAL EQUITY VERSUS SOCIAL ADEQUACY Individual Equity a person who contributes to the system should receive the level of benefit appropriate to his contributions and the risks involved Social Adequacy benefits should be able to provide a certain adequate standard of living to all contributors, downplaying the factors of number and amount of contribution 13. PRINCIPLES OF A SOCIAL INSURANCE SYSTEM Benefits should replace lost earnings Benefits must be high enough to be effective and low enough to encourage incentive and thrift There must be legal right to receive social insurance benefits (right to benefit subject to contribution conditions) 14. Should embrace all contingencies in which an insured person is prevented from earning his living whether by inability to work or death Should be financed by contributions, preferably with those who are protected and their employers jointly paying the bill Self-employed persons should be insured against the contingencies of invalidity, old age and death under the same conditions as employed persons PRINCIPLES OF A SOCIAL INSURANCE SYSTEM 15. st 3rd Pillar Redistribute & income replacement 1Pillar DB or Notional DC, Earning-related DB or Notional DC, Earning-related Contribution/ Pay-as-you go/ Partially-funded Contribution/ Pay-as-you go/ Partially-funded 2ndPillar DC, Benefits Equals Cont + Earnings DC, Benefits Equals Cont + Earnings Tax-Preferred Private savings / Fully funded Tax-Preferred Private savings / Fully funded Individual savings account 4th Pillar Informal intra-family Or inter-generational sources Informal intra-family Or inter-generational sources Financial and Other assets Financial and Other assets Continuing protection Tax preferred Private savings/ Fully Funded Tax preferred Private savings/ Fully Funded DB or DCDB or DC Income Smoothing & enhanced savings Mandatory Publicly Managed Pillar Mandatory Privately Managed Pillar Voluntary Privately Managed Pillar Voluntary Privately & Informally Managed Pillar THE FIVE PILLARS OF OLD AGE INCOMETHE FIVE PILLARS OF OLD AGE INCOME SECURITYSECURITY Demogrant or social pension 0Pillar Means-tested, Minimum Benefits Means-tested, Minimum Benefits GovernmentGovernment Mandatory Publicly Managed Pillar Objectives Form Financing 16. st 3rd Pillar Redistribute & income replacement 1Pillar DB or Notional DC, Earning-related DB or Notional DC, Earning-related Contribution/ Pay-as-you go/ Partially-funded Contribution/ Pay-as-you go/ Partially-funded 2ndPillar DC, Benefits Equals Cont + Earnings DC, Benefits Equals Cont + Earnings Tax-Preferred Private savings / Fully funded Tax-Preferred Private savings / Fully funded Individual savings account 4th Pillar Informal intra-family Or inter-generational sources Informal intra-family Or inter-generational sources Financial and Other assets Financial and Other assets Continuing protection Tax preferred Private savings/ Fully Funded Tax preferred Private savings/ Fully Funded DB or DCDB or DC Income Smoothing & enhanced savings Mandatory Publicly Managed Pillar Mandatory Privately Managed Pillar Voluntary Privately Managed Pillar Voluntary Privately & Informally Managed Pillar THE FIVE PILLARS OF OLD AGE INCOMETHE FIVE PILLARS OF OLD AGE INCOME SECURITYSECURITY Demogrant or social pension 0Pillar Means-tested, Minimum Benefits Means-tested, Minimum Benefits GovernmentGovernment Mandatory Publicly Managed Pillar Objectives Form Financing : PHILIPPINES: PHILIPPINES Social Pension (P500) for Indigent Senior Citizens Senior Citizens Law (RA 9994) Family Support Family Wealth Private Pension Plans Insurance Company- Provided Retirement Plans Own Savings Provident Fund for SSS Members? PERA?SSS GSIS Pag- IBIG 17. Branches of Social Security 18. BRANCHES OF SOCIAL SECURITY International Labor Organization ILO Convention No. 102 SSS provided branches of social security GSIS provided branches of social security 19. INTERNATIONAL LABOR ORGANIZATION (ILO) tripartite organization (workers, employers and government) set up to bring government, employers and trade unions for united action in the cause of social justice and better living conditions everywhere important function is the adoption of International Labor Conference of Conventions and Recommendation which set International Labour Standards 20. ILO Convention 102: Multilateral agreement with regard to minimum standards of social security Nine (9) branches of social security 1.Old-age 2.Survivor 3.Invalidity 4.Family allowances 5.Sickness 6.Maternity 7.Medical care 8.Unemployment 9.Employment-injury BRANCHES OF SOCIAL SECURITYBRANCHES OF SOCIAL SECURITY 21. ILO Convention 102: Multilateral agreement with regard to minimum standards of social security Nine (9) branches of social security 1.Old-age 2.Survivor 3.Invalidity 4.Family allowances 5.Sickness 6.Maternity 7.Medical care 8.Unemployment 9.Employment-injury BRANCHES OF SOCIAL SECURITYBRANCHES OF SOCIAL SECURITY SSS GSIS 22. Financing / Funding Schemes 23. Cash Flow in a Typical Social Security Scheme Contributions from employers Contributions from insured persons Penalty payments Government subsidy SOCIAL SECURITY INSTITUTION Benefit Payments Administration Expenses Investment Expenses Investment income 24. FINANCIAL SYSTEMS: Pay-as-you-go vs. Full-funding Pay-as-you-go scheme Full-funding scheme ? SOCIAL SECURITY INSTITUTION 25. PAY-AS-YOU-GO Financial System How does it work? Collected are contributions only needed to fund current benefits, expenses and contingency fund Contribution rates have to be increased periodically No funds to invest C B 26. PAY-AS-YOU-GO Financial System How does it work? No funds would be set aside in advance ahead of the times when benefits are payable The benefits would be paid from current income of the scheme Under this system, a social insurance scheme incurs steadily increasing annual benefit expenditures 27. How does it work? Given the pattern of rising annual expenditures in a pension scheme, the contribution rate would be low at the inception of the scheme and would increase annually for many years thereafter PAY-AS-YOU-GO Financial System 28. Where is this applicable? PAY-AS-YOU-GO System SHORT-TERM BENEFITS Medical care Sickness Maternity Unemployment benefits Funeral grants PAY-AS-YOU-GO Financial System 29. How does it work? FULL FUNDING Financial System Collected are contributions needed to fund current and future benefits, expenses and contingency fund Stable contribution rate, lower in long term Reserves are accumulated and invested, ROI > Inflation Guaranteed payment of benefits during periods when benefits exceed contributions B C 30. How about in social insurance pension schemes? Since social security schemes are not subject to premature cessation, and since they normally have continuous flow of new entrants, it is not necessary to have a high level of funding to guarantee benefits Full-funding is rarely used to finance social insurance pension schemes, other than being used principally to indicate the probable long-term cost of the pension scheme FULL FUNDING Financial System 31. What Financial System Does A Social Insurance Pension Scheme Need? A financial system that has the following criteria: The contribution rate should not exceed the capacities of insured persons, employers and the economy in general to support it The reserves generated should not exceed the capacity of the country to effectively absorb the investments in a profitable manner Contribution rates should remain relatively stable for extended periods of time, or any increases should be gradual 32. SCALED PREMIUM FINANCIAL SYSTEM: An Alternative System of FinancingAn Alternative System of Financing The contribution rate is established so that, over a specified period of equilibrium (e.g., 5, 10 or 20 years), the contribution income and interest on the reserves of the scheme will be adequate to meet the expenditures on benefits and administration A period of equilibrium is chosen which is of limited duration but is sufficiently long to guarantee a certain stability of the contribution rate 33. The contribution rate is determined in such a way that the expected receipts (contributions and investment income) of the scheme, during the period of equilibrium, will be equal to expected expenditures The financial system does not provide for the use of the principal of the accumulated funds to cover current expenditure (only the interest on the accumulated funds is used) SCALED PREMIUM FINANCIAL SYSTEM: An Alternative System of FinancingAn Alternative System of Financing 34. When current contributions plus investment income are no longer sufficient to cover expenditure, the premium is raised to the level required for a subsequent period of equilibrium SCALED PREMIUM FINANCIAL SYSTEM: An Alternative System of FinancingAn Alternative System of Financing 35. 25 20 15 10 5 GENERAL AVERAGE PREMIUM SCALED PREMIUM (20-YR PERIOD OF EQUILIBRIUM) PAY-AS-YOU- GO (PAYG) 20 40 60 YEARS CONTRIBUTIONRATE As % of earnings SCALED PREMIUM FINANCIAL SYSTEM: An Alternative System of FinancingAn Alternative System of Financing 36. 36 Pension funding around the world Mandatory schemes by type of financing Partially- Funded 33% Funded or mixed 18% PAYG 49% Number of Plans =115 Source: World Bank (Yvonne Sin) 37. Actuarial Valuation 38. ACTUARIAL VALUATION What is an actuarial valuation Valuation requirements International standards 2007 actuarial valuation Results Recommendations 39. SUSTAINABLE FINANCING: PROJECTIONS AND PLANNING Answers the question of how long Fund will last over time. It uses a set of assumptions on the factors that affect the fund life, reconciling past experiences with future projections. The mathematical and statistical techniques should be correct, and analysis appropriate. A set of recommendations completes the valuation. What is an actuarial valuation? A set of financial and demographic projections based on a particular set of assumptions Is NOT a crystal ball prediction A useful tool management can use to help ensure the sustainability of the social security program 40. SUSTAINABLE FINANCING: PROJECTIONS AND PLANNING Brief Description of the Scheme identification of changes in provisions of the schemes since the preceding valuation Observations on Statistical Data availability, adequacy, quality extract from input on insured persons and beneficiaries comparison with previous valuation Description of Development of Scheme Number of insured persons and beneficiaries Amounts of contributions and benefits Investment portfolio Rates of return Description of system which has been adopted for financing the scheme Valuation Requirements 41. SUSTAINABLE FINANCING: PROJECTIONS AND PLANNING Description of Demographic and Economic Assumptions Identification of changes from actuarial assumptions in preceding valuation Demographic and Financial Projections Analysis of projections Comparison with projections of previous valuations Sensitivity Analysis of actuarial assumptions Conclusions and Recommendations Suitability of financial system Adequacy of contribution rate Efficiency of benefit formulae Adjustment of pensions in payment Level of administration expenses Investment policy and performance Valuation Requirements 42. SUSTAINABLE FINANCING: PROJECTIONS AND PLANNING Principles of Actuarial Practice Scientific Rigour Objectivity Transparency, explicitness, simplicity and consistency of information supplied in the report Information to be included in Actuarial Reports Executive Summary Introduction Description of the provisions of the Social Security Program Data Assumptions Methodology Results Conclusions Attestations IAA Guidelines of Actuarial Practice for Social Security Programs 43. 2007 Actuarial Valuation Key Projection Results Under Different Scenarios SUMMARY OF RESULTS 44. AS OF YEAREND 2006 Group 1 (Contributing Members) 6.3-M, 28% Group 2 (Noncontributing Members) 14.3-M, 64% Group 3 (Noncont to Cont) 0.8-M, 4% Group 4 (New Entrants) 0.9-M, 4% VALUATION DATA Total Membership By Group, Group 1 Ave. Age : 35.20 Ave. MSC : 6,661 Ave. No. of Cont. Paid : 89.48 Ave. CYS : 7.91 Ave. Density : 9.45 Group 4 Ave. Age : 24.54 Ave. MSC : 5,653 Ave. No. of Cont. Paid : - Ave. CYS : 0.41 Ave. Density : 4.83 Group 3 Ave. Age : 34.90 Ave. MSC : 4,497 Ave. No. of Cont. Paid : 41.06 Ave. CYS : 4.10 Ave. Density : 5.34 Group 2 Ave. Age : 43.14 Ave. MSC : 2,533 Ave. No. of Cont. Paid : 34.50 Ave. CYS : 6.30 Ave. Density : - 45. Retirement 49% Death 46% Partial Disability 3% Total Disability 2% * Source of Data : ADM 2 & ADM 3 VALUATION DATA AS OF YEAREND 2006 Total Pensioners : 1,135,027 Total Disability : 24,456 Ave. Age : 61.6 Ave. Pension : 2,203.3 Ave. No. Dependents : 0.4 Ave. Age of Dependents: 15.0 Retirement : 550,380 Ave. Age : 69.1 Ave. Pension : 3,076.3 Ave. No. Dependents : 0.2 Ave. Age of Dependents: 16.9 Partial Disability : 32,462 Ave. Age : 51.5 Ave. Pension : 2,628.4 Ave. No. Dependents : - Ave. Age of Dependents: - Death : 527,729 Ave. Age : 64.1 Ave. Pension : 2,320.0 Ave. No. Dependents : 0.6 Ave. Age of Dependents: 14.8 Pensioners Profile 46. INTEREST RATES INFLATION RATES Year 10-Year 20-Year Realistic 2007 7.16% 8.60% 2.8% 2008 8.27% 9.96% 9.3% 2009 12.07% 13.07% 5.4% 2010 11.75% 12.71% 4.1% 2011 11.38% 12.36% 4.6% 2012 10.95% 11.98% 5.1% 2013 10.73% 11.71% 5.1% 2014 10.60% 11.62% 4.5% 2015 10.38% 11.48% 3.3% VALUATION ASSUMPTIONS Economic Assumptions Other assumptions such as in population and membership, mortality and disability, fertility, sickness, benefit utilization and other rates, contributions, investments and operating expenses, were also considered. 47. VALUATION METHODOLOGY Mathematical models in membership, demographic, contribution, benefits, investments and operating expenses were formulated. 48. VALUATION RESULTS Financial Projections (No Pension Increase) (Amount in Billions) 2007 vs. 2039 Beginning SSF P205.88-B 2007 Contributions 60.77-B Earnings 17.12-B Benefits 59.67-B Expenses 6.7-B Fund Ratio 3.10 Paying Members 8.3 M Yearend Pensioners 1.3M Ave. Pensions 3,257 Support Ratio 14.71 Ratio of Pensioners to Paying Members 6.39 2039 Contributions 246.61-B Benefits 544.45-B Fund Ratio 0.02 Beginning SSF P13.14-B Earnings 0.02-B Expenses 28.96-B Paying Members 19.3 M Yearend Pensioners 5.9 M Ave. Pensions 6,646 Support Ratio 7.12 Ratio of Pensioners to Paying Members 3.28 49. Option Criteria / Condition Fund Life Baseline Contribution rate unchanged at 10.4% 2039 A Contribution rate at 11% 2042 B Contribution rate at 12% 2048 C Contribution rate at 13% 2057 D Contribution rate at 14% PERPETUITY E Gradual Increase following the schedule: 2011 11.4% 2021 16.4% 2031 21.4% PERPETUITY SENSITIVITY ANALYSES ON CONTRIBUTIONS Varying the Contribution Rate 50. Option Criteria / Condition Fund Life Baseline No Across-the-Board Pension Increases 2039 A Increase rate based on inflation 2028 B Increase rate of 5% annually 2026 C Increase rate of 10% annually 2020 Assuming Annual Across-the-Board Pension Increases SENSITIVITY ANALYSES ON BENEFITS 51. SENSITIVITY ANALYSES ON INVESTMENTS Varying the Return on Investment 52. CONCLUSIONS : (Amount in Billions) SSF Will Last From 2031 to 2039 BEGINNING SSF 0 200 400 600 800 1,000 1,200 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 inbillionpesos 2003 Valuation 2007 Valuation Improvement in the Fund Life 53. CONCLUSIONS : The Ratio of Pensioners to Paying Members Decreases 54. 0 100 200 300 400 500 600 700 inbillionpesos Contributions Benefits Total Disbursements CONCLUSIONS : Benefit Payments to Exceed Contribution Collection Starting 2022 (Amount in Billions) Contribution s vs. Benefit Payments and Total Disbursements, 2007-2040 Contributions Insufficient to Cover All Disbursements 55. CONCLUSIONS : Further reforms to continuously improve the social security scheme By year 2030, the investment income would no longer be sufficient to cover the gap between contributions and total disbursements. 56. RECOMMENDATIONS : Seven Recommendations Proposed 1. Increase the contribution rate; 2. Increase the minimum Monthly Salary Credit (MSC); 3. Increase the maximum Monthly Salary Credit with a modified pension formula; 4. Improve the contribution collection and employer compliance; 5. Increase qualifications for eligibility for monthly pensions; 6. Raise the retirement age; and 7. Maximize the investment income. 57. Administering / Managing Social Security 58. ADMINISTERING/MANAGING SOCIAL SECURITY Operating environment: Philippines, Filipinos Organization Membership and coverage Actuarial fund balance Contributions Investments Benefits Operating expenses Financial summary: SS & EC 59. A fun archipelagic nation PHILIPPINES Regional location: South East Asia Population: 94.2 M Population Growth: 1.873% Population Density: 316/sq. km Life Expectancy: 71.94 years Median Age: 23.1 OUTPUT 2003 2011 GNP $117.8-B $297.3-B Per Capita GNP $1,472.5 $3,157.1 El Nido, Palawan Mayon Volcano, Albay Donsol, Sorsogon Banaue Rice Terraces, IfugaoChocolate Hills, BoholRizal Park, Manila Sources: NSCB; CIA World Factbook Source: NSCB 60. 2003 2011 Labor Force 34.6-M 37.2-M Employment Rate 87.8% 93.0% Filipinos sought after at home and around the globe TOP 4 Countries with Largest Overseas Workers Remittance Received: Country Remittance As % of GDP 1. India $ 54.03-B 3.4% 2. China $ 53.04-B 0.9% 3. Mexico $ 22.05-B 2.1% 4. Philippines $ 21.42-B 10.7% Country Employed 1. Philippines 416,000 2. India 350,000 TOP Contact Center Countries (2011) Comparative Labor Data, Philippines 2003 vs 2011 Number of Workers, Philippines 2011 Domestic Employment 37,192,000 Overseas Employment (Documented) 1,687,831 OFW Stock (2010) 9,452,984 Emigrant 83,410 PHILIPPINES: worlds largest supplier of seafarers (ILO, Nov 2009), contributing around 30% of the seafarers in the international maritime sector (POEA, Jan 2011) ; Total deployed Filipino seafarers: 369,104 (NSCB, 2011) PHILIPPINES Sources: NSCB; CFO Source: BPAP Country Employment in BPO (2011) 1. India 835,000 2. Philippines 640,000 TOP 2 Countries in BPO 61. The Social Security Commission is composed of nine (9) members as follows: The SSS President The Secretary of Labor Three (3) representatives from the workers group, at least one of whom is a woman; Three (3) representatives from employers group, at least one of whom is a woman; and One (1) representative from the general public Organizational Overview 62. Social Security Commission Commission Legal Counsel Office of the PCEO Office of the Commission Secretary New Organizational Chart Audit Committee Internal Audit Operation UnitsOperation Units Support UnitsSupport Units Investments Branch Operations International Operations Account Management Benefits Administration Lending and Asset Management Member Services Management Services & Planning Corporate Services Legal Services Medical Services Actuarial Services Public Affairs & Special Events 63. Social Security System Summary of Operations International Agreements Countries that signed with the Philippines for mutual cooperation in the field of social security (16 countries) Austria since 1982 United Kingdom - 1989 Northern Ireland - 1989 Spain - 1989 France - 1989 Canada -1997 Quebec - 1998 Netherlands - 2001 Switzerland - 2004 Belgium - 2005 Greece (for signing) Japan (under negotiation) Korea (under negotiation) Israel (for ratification) Portugal (for ratification) Bicol Region[10] Main Office : 1,641 Branch Offices : 3,400 TOTAL : 5,041 WORKFORCE Abu Dhabi Al-Khobar Brunei Doha Dubai Hong Kong Jeddah Kuala Lumpur Kuwait London Milan Riyadh Rome Singapore Taipei PLUS 15 Foreign Offices 132 Branch Offices 42 Service Offices 30 Rep. Offices* 204-TOTAL BRANCH OFFICES * Includes Foreign Offices & POEA 64. Compulsory CoverageCompulsory Coverage a. Employees b. Self-Employed c. Others: seafarers, workers in the informal sector, owner of a single proprietorship business, actors, directors, professional athletes, coaches, individual farmers and fishermen d. Employers with at least 1 employee 65 Coverage Farm ers and fisherm en HouseholdHelpers Overseas Workers Regular employees Self-employed workers O w ner of single proprietorship business Seafarers Informalsector Voluntary CoverageVoluntary Coverage a. OFW: Filipinos recruited for employment abroad b. Spouses devoted to household and family affairs c. Employee of a foreign government, international organization of their wholly- owned instrumentality based in the Philippines 65. 20011997 1998 1988 1975 196019581957 1973 1980 1978 1954 1972 Historical Highlights 1992/1993 1995 66. 67 As of December 2012 SSS MEMBERS Employees 21,945,734 Employees 21,945,734 Self-Employed 3,803,327 Self-Employed 3,803,327 Voluntary 3,708,306 Voluntary 3,708,306 TOTALTOTAL 29,457,36729,457,367 TOTALTOTAL 29,457,36729,457,367 SS & EC PENSIONERS Retirement 833,528 Death 701,659 Disability 60,554 TOTAL 1,595,741 TOTAL 1,595,741 Luzon North [1,320,710] NCR [15,379,210] Mindanao South [2,213,260] Mindanao West [634,560] Mindanao North [1,479,221] Visayas Central [2,185,842] Visayas West [1,713,765] Luzon South [1,998,568] Luzon Central [1,876,851] Bicol [655,380] Membership As of December 2012 67. 68 Actuarial Fund Balance Cont + Inv Income = Ben + Oper Exp Contribution s BenefitsInvestment Income Operating Expenses 68. 69 Covered WagesCovered Wages Based on 29 salary brackets Salary Bracket Compensation Range Monthly Salary Credit I P1,000 P1,249.99 P1,000 II P1,250 P1,749.99 P1,500 III P1,750 P2,249.99 P2,000 IV P2,250 P2,749.99 P2,500 : : : : : : XXVII P14,250 P14,279.99 P14,500 XXIX P14,750 and up P15,000 Sources of FundSources of Fund Employer Employee Government Distribution of Members ContributionsDistribution of Members Contributions January-December 2012 P94.21-B Jan-Dec 2012 Total Contributions Contributions ContributionContribution RateRate Employer - 7.07% Employee - 3.33% TOTAL - 10.4% Contribution CollectionContribution Collection SS & EC FundsSS & EC Funds Years 2000 2012 Amount in Billion Pesos 0 20 40 60 80 100 C o ntri 30 31 34 39 44 47 53 62 69 72 79 86 94 200 0 2001 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 2010 2011 2012 SS, 98.43% EC 1.57% 69. 70 EMPLOYEE 3.33% EMPLOYER 7.07% SS CONTRIBUTION RATE: P104-P1,560 (10.4% of the employees MONTHLY SALARY CREDIT P1,000 to P15,000) EC CONTRIBUTION RATE: P10, MSC