Guide
on How to Compute SSS Monthly Pension
Wondering how much will you get
from SSS contribution when you retire? Based from my research, the amount of
monthly pension depends on contribution and time. Question is, is this monthly
pension enough at the time you retire?
Retirement benefit is a cash benefit either in monthly pension or lump sum paid to a member who can no longer work due to old age.
Retirement benefit is a cash benefit either in monthly pension or lump sum paid to a member who can no longer work due to old age.
Qualifications
·
A member who is 60 years old, separated form employment or ceased
to be self-employed, and has paid at least 120 monthly contributions prior to
the semester of retirement.
·
A member who is 65 years old whether employed or not and has paid
at least 120 monthly contributions prior to the semester of retirement.
For Underground Mine
workers:
·
Has reached the age of 55 years old and is an underground mine
worker for at least 5 years (either continuous or accumulated) prior to the
semester of retirement but whose actual date of retirement is not earlier than
March 13, 1998; separated from employment or in the case of self-employed, has
ceased self-employment, and has paid at least 120 monthly contributions prior
to the semester of retirement.
·
Has reached the age of 60 years old whether employed or not.
Types of Retirement Benefits
Monthly Pension
The monthly pension is a
lifetime cash benefit paid to a retiree who has paid at least 120 monthly
contributions to the SSS prior to the semester of retirement.
Lump Sum
The lump sum amount is granted
to a retiree who has not paid the required 120 monthly contributions. It is
equal to the total contributions paid by the member and by the employer
including interest.
In this post, I will be discussing the monthly pension calculation only.
In this post, I will be discussing the monthly pension calculation only.
Monthly Pension
Benefit Computation
The monthly pension depends on
the member's paid contributions, his credited years of service (CYS), and the
number of his dependent minor children that must not exceed five. The monthly
pension will be the highest amount resulting from either one of these three
pension formulae:
1. the sum of P300 plus 20 percent
of the average monthly salary credit plus two percent of the average monthly
salary credit for each credited year of service (CYS) in excess of ten years;
or
2. forty (40) percent of the
average monthly salary credit; or
3. P1,200, if the CYS is at least
10 but less than 20; or P2,400, if the CYS is 20 or more.
The monthly pension is paid for
not less than 60 months.
A member who retires after age
60 with a total of 120 monthly contributions may be qualified to a monthly
pension based on whichever is higher of the following:
·
the monthly pension computed at the earliest time the member could
have retired had been separated from employment or ceased to be self-employed
plus all adjustments thereto; or
·
the monthly pension computed at the time when the member actually
retires.
A pensioner who retires more
than once shall be entitled to the higher of:
·
the monthly pension computed for the first retirement claim; or
·
the re-computed monthly pension for the new claim
Illustration
An employed SSS member with
monthly salary of P 30,000.00 and is now 60 years old is eligible to retire
after working for 30 years.
Referring to SSS table of contribution, the retiree's contribution is P 581.30 and P 1,208.70 for his employer's contribution. Total contribution of P 1,790.00 per month. This total amount is his average monthly contribution. Thus, his average monthly salary credit (AMSC) falls to P 16,000.00.
Referring to SSS table of contribution, the retiree's contribution is P 581.30 and P 1,208.70 for his employer's contribution. Total contribution of P 1,790.00 per month. This total amount is his average monthly contribution. Thus, his average monthly salary credit (AMSC) falls to P 16,000.00.
Average total contribution is P 1,790.00 x 30 years x 12 months = P
644,400.00.
Method 1
Monthly SSS Pension = (AMSC)
20% + (AMSC) 2% for year of service in excess of 10 years + PHP300
Monthly SSS Pension = (P 16,000*20%) + (P 16,000*2%*20 years) + P 300
Monthly SSS Pension = P 3,200 + P 6,400 + P 300
Monthly SSS Pension = P 9,900.00
Method 2
Monthly SSS Pension = (P 16,000*20%) + (P 16,000*2%*20 years) + P 300
Monthly SSS Pension = P 3,200 + P 6,400 + P 300
Monthly SSS Pension = P 9,900.00
Method 2
Forty percent (40%) of the
average monthly salary credit
Monthly SSS Pension = P 16,000 * 40%
Monthly SSS Pension = P 6,400.00
Method 3
Monthly SSS Pension = P 16,000 * 40%
Monthly SSS Pension = P 6,400.00
Method 3
P 1,200, provided that the
credited years of service (CYS) is at least 10 or more but less than 20 or P
2,400, if the credited years of service CYS is 20 or more.
Monthly SSS Pension = P 2,400.00 since he has more than 20 credited years of service.
The highest amount among the three methods of computation will be the retiree's monthly pension. Thus, the first computation yields as the highest with P 9,900.00. His monthly pension can be based on this amount.
For him to break-even in his contributions, it will take for at least 5.40 years (65.1 months) to fully benefit from the pension assuming he has not used any of his SSS benefits.
Monthly SSS Pension = P 2,400.00 since he has more than 20 credited years of service.
The highest amount among the three methods of computation will be the retiree's monthly pension. Thus, the first computation yields as the highest with P 9,900.00. His monthly pension can be based on this amount.
For him to break-even in his contributions, it will take for at least 5.40 years (65.1 months) to fully benefit from the pension assuming he has not used any of his SSS benefits.
Do you think this amount is
enough for your retirement? Share your thoughts on the comment box. :
