Recently, the President has signed the increase in pension for about two million pensioners of the Social Security System. The approved increase is about Php 1,000.00.
If you’ve been paying your monthly contributions for many years, it’s your right to know how much pension you would receive during your retirement.
However, many SSS members don’t know how the pension is computed. This rises an argument whether to pay only the minimum amount or the maximum amount of contribution.
Computation of Monthly SSS Pension
Definitely, the amount of pension that a member can expect depends of his or her paid contributions. The credited years of service is also considered and the number of minor dependent children.
There are three formulas that have been using when computing the monthly pension of the retirees such as the following:
- The allotted amount of P300 added to 20% of the monthly salary credit added to 2% of the monthly salary credit for every credited year of service exceeding to 10 years, or
- Forty percent of the monthly salary credit, or
- If the credited year of service is at least 10 years but not exceeding to 20 years, the member pensioner can receive a monthly pension of P1,200. If the CYS is more than 20 years, the pensioner will receive monthly pension amounting to P2,400.
Unlike other benefits offered by the SSS, the computation of the monthly pension is based from the most recent or actual contributions.
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This means that if you’ll pay higher monthly contributions, most likely you’ll receive higher monthly pension when you retire.
On the other hand, massive increase to your monthly contribution is not allowed by the SSS. The increase should be adjusted gradually. This means that a member can only increase the monthly contribution once in a year and one salary bracket only.
It would be more beneficial to pay the maximum amount of monthly contributions so that you can also expect for higher monthly pension when you reach the retiring age.
According to a financial expert, it’s not a good idea to depend solely to the SSS for your retirement. This is true especially if your monthly contributions are low because the benefits that you’ll receive in the future would be insufficient for your retirement needs.
Therefore, if you want to receive higher monthly pensions in the future, the best thing to do is to start paying higher monthly contributions at an early age.