June 7, 2019 | Posted by: Ricky Publico | Government Services
June 7, 2019
It’s better to just set things straight away: the pension you’ll receive from SSS won’t be enough to fund your retirement plan. As early as now, you should be investing in a retirement savings plan to provide your future self enough money to continue living beyond 60 years. Having said that, you should still learn how to compute your SSS pension since it will become a consistent source of income when you’re past your prime. The amount you’ll receive may not be ideal for an extravagant lifestyle, but it’s better than not having a fallback.
And with the recent passing of RA 11199 or the Social Security Act of 2018, SSS increased the monthly contribution by 12% to provide better pension and benefits for SSS members. “It is high time to adjust the contribution rates and monthly salary credits of SSS to allow members to save more for their retirement,” SSS OIC Aurora C. Ignacio said in a statement. How will the recent contribution hike affect your SSS pension in the future? Prepare your calculators and start planning the future with this helpful SSS pension computation guide.
The amount of your pension will depend largely on your paid contributions, your number of active years as an SSS member, and the number of dependent minor children you have. Retirees are entitled to an SSS pension increase of PHP 1,000 as approved by the president in 2017. There are three formulas used to compute your SSS pension, but whichever yields the highest amount will determine your final pension.
Let’s focus on the first SSS pension formula since it’s the formula that will more likely give you the highest possible amount of pension. And as you can see, it can be confusing to comprehend on paper. So let’s apply the formula in a specific scenario. For example, Senior Citizen John is earning PHP 30,000 and has contributed to the SSS for 40 years. According to the new SSS contribution table effective April 2019, his AMSC is PHP 20,000. Here’s how his SSS pension computation will look like.
Monthly Pension (MP) = PHP 300 + (20% of AMSC) + [2% of AMSC x 30 years (40 years – 10)] + PHP 1,000
MP = PHP 300 + (0.20 x 20,000) + (0.02 x 20,000 x 30) + PHP 1,000
MP = PHP 300 + PHP 4,000 + PHP 12,000 + PHP 1,000
Monthly SSS Pension = PHP 17,300*
*Note: This SSS pension computation doesn’t account for inflation. For a more accurate estimation of your expected pension, consult your local SSS office.
But if numbers and formulas scare you, there’s an easier way to calculate your SSS pension. Try the SSS Retirement Benefit Estimator found on the SSS website. Just enter your birthdate, the month and year when you started as an SSS member, and your current monthly salary. Then enter the captcha code and click the ‘Compute’ button. The SSS calculator will show you two sets of monthly pension amounts: one for when you retire at age 60 and another for when you retire at 65. The SSS pension is higher if you choose retirement at age 65.
Your SSS pension comes as a cash payment you’ll receive when you can no longer work because of old age. There are two ways to qualify for retirement benefits. All retirement benefits claims can be filed at any SSS branch or representative office.
When you make your retirement benefits claim, SSS will require you to open a single savings account and submit a photocopy of your passbook, ATM card, initial deposit slip, bank statement, or Visa Cash Card enrollment form. SSS will pay you SSS pension through your designated bank (ideally the branch nearest to you). You can receive your retirement benefits in either of these two ways.
The SSS Retirement Program provides more than just pension. Retirees will receive other benefits such as the following.
Upon your death, your primary beneficiaries listed as of the date of retirement will be entitled to 100% of your pension. Should you pass away 60 days from the start of the monthly pension and have no primary beneficiaries listed, the secondary beneficiaries will be awarded a lump sum benefit equal to the five-year guaranteed period, excluding the dependents’ pension.
It’s never easy to talk about things like retirement, but you should have a general idea of what to do when you grow old. As early as now, you should start mapping your golden years, and a great way to start is to know the basic SSS pension computation. Hopefully from there, you’ll start learning about the importance of savings, life insurance, and investments. Not only will this make your 60’s a lot easier to live through, you’ll also provide your children and their children financial support even after you leave this place.