Philippines ponders pension rate hike as funds drop

A drop in earnings has prompted calls for an increase in the contribution rate to the Philippines'' pension fund system.

The Philippines' pension authority is planning to raise an extra Ps13 billion $288.3 million a year for the country's central pension fund scheme to help fund increased benefits for retirees, prompting calls from employers for consultation before any decision is made.

Carlos A Arellano, chairman of the Social Security System SSS, revealed last week the regulator would have to lift the pension contribution rate from the current 8.4% to 12% because of increases in benefits recently announced, under which all pension benefits will receive a 10% boost, while funeral benefits will rise by Ps5000 to Ps20,000. The increases are estimated to cost Ps10 billion and Ps3.5 billion respectively over the next five years....

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