The Social Security Board is promoting its 2025-2029 strategic plan in a series of public consultations. This year they are focusing on scheme modernization which means publicly floating proposed legislative amendments. And one of them is to shift from wage band system to a percentage based system.
Now, if that's gibberish to you, here's what it means: the wage band groups workers into income brackets, or "bands." Whether you make two hundred dollars or nearly three hundred dollars, if you fall into the same bracket, you get the same benefits, and you and your employer pay the same fee. But the SSB wants to modernize, pushing to join more than one hundred countries that use a "percentage-based" model. Instead of rigid brackets, your contribution would be a straight, fixed percentage of your actual earnings. If you make more, the deduction matches it precisely; if you make less, it scales down.
According to the CEO, it would correct an imbalance of benefits:
Jerome Palma, CEO - SSB
"Well, the appeal is because the current system, we call it a wage band system, but it really is a fixed earnings system, so it moves incrementally."
"It moves from $55 to 90 to 130. And it keeps going up in that way all the way up to $520. So what we saw was a limitation of benefit. There's only 13 insurable earning points that people can be at. It became a bit of inequity where some people were contributing at a higher amount than others, lower and vice versa."
"So we recognize where a shift now to an actual of salary between a floor and a ceiling would be more appropriate. It allows for a more level playing field where you're earning $200, you're contributing at $200. Compared to what we're seeing right now, you know, between bands, some people are earning, as we did in the example you are earning $220, but they're contributing at $240."
"Then people are earning $250, but they're also contributing at 240. So you have an imbalance of benefits. Some people then are getting sickness benefit based on a higher salary, and you're getting retirement benefits on a higher salary. And the opposite then becomes true. People earning a little bit more are not entitled for that little bit more. So we recognize where this was a structural shift to get that way from a very fixed and rigid system to a system that will allow for change and growth over time."
