How is the SSS Retirement Benefit or Monthly Pension Computed

SSS Retirement benefit is just one of the many benefits that the Philippine Social Security System provides to its members and their beneficiaries.

It is an amount given to the member who can no longer work due to old age and that is when he or she reaches the retirement age of 60 or 65.

• READ: 13th Month Pension ng SSS ngayong 2018, sino nga ba ang makakatanggap?

There are two types of retirement benefit.

• Lump sum amount
• Monthly Pension

The lump-sum amount is a one-time payment granted to a retiree while the monthly pension is a lifetime cash benefit paid to a retiree on a regular monthly basis.

The lump-sum amount is equal to the total contributions that you have paid plus the interest that it earned over the years.

The lump-sum amount can be availed by a member who has paid less than 120 monthly contributions. However, the member will be given the option to continue paying the contributions as a Voluntary Member to complete the 120
months to avail the monthly pension from SSS.

If you’re wondering how much will your monthly pension be when you retire, read on as I explain the formula and computations in details.

How is the Monthly Retirement Pension Computed?

There are 3 ways to compute for a monthly pension. The one that will come up with the highest amount will be used to compute for your monthly pension.

1. Add P300; plus 20 percent of the average monthly salary credit (AMSC); plus 2 percent of the AMSC for each credited year of service (CYS) in excess of 10 years
2. 40% of the AMSC
3. A minimum pension of P1,200 for members with at least 10 CYS and P2,400 for those with 20 CYS.

To understand these three computations better, let’s use some examples.

Example

Mary is a self-employed member of the SSS who contributed for 25 years. The maximum amount of monthly contribution changes but let’s just assume that she paid P1,760 per month for 25 years with the average monthly salary credit (AMSC) of P16,000.

a. Using Formula 1:

• = P300 + 20% (16,000) + [2% (16,000) x (25-10)]
• = P300 + P3,200 + [320 x 15]
• = P300 + P3,200 + P4,800
• = P8,300

b. Using Formula 2:

• = 40% of the AMSC
• = 40% x P16,000
• = P6,400

c. Using Formula 3:

• = P2,400 for those with 20 CYS
• = P2,400

Since the Formula 1 came up with the highest amount, Mary’s basic pension shall be P8,300.

Additional Benefits:

• P1,000 Additional Retirement Benefit

Based on SSS Circular No. 2017-002 signed by President Rodrigo Duterte, all pensioners will be granted P1,000 additional benefit effective January 2017.

• Dependent’s Pension

If the retiree pensioner still has dependent children at the time of retirement, each dependent child (not to exceed five starting from the youngest) shall be entitled to a dependent’s pension, of 10 percent of the basic pension, or P250 per child, whichever is higher, until they reach the age of majority, get employed or get married.

Mary’s Total Monthly Pension

Mary may be able to receive a total of P9,300 (P8,300 + P1,000) for her monthly pension from SSS.

Q&As about SSS Retirement Benefit

Question 1: What if Mary paid her SSS monthly contributions for 30 years? 

In this case, let’s just use Formula 1 to compute for Mary’s monthly pension.

• = P300 + 20% (16,000) + [2% (16,000) x (30-10)]
• = P300 + P3,200 + [320 x 20]
• = P300 + P3,200 + P6,400
• = P9,900

Mary’s basic pension is P9,900 plus P1,000 additional benefit. Her total monthly pension would be P10,900.

Question 2: Can Mary get a lump sum of her monthly pension? 

Yes, Mary has the option to receive her first 18 months’ pension in lump sum. The lump sum amount will be discounted at a preferential rate of interest to be determined by the SSS. After 18 months, Mary will again receive her pension starting on the 19th month and the following months.

Question 3: Is it worth paying the maximum monthly contribution to get the maximum retirement benefit? 

Yes, you will get the highest possible retirement pension based on the amount of your monthly contribution and the number of years that you contributed to SSS.

Aside from the retirement benefit, you or your beneficiaries will also be able to receive the highest possible amount when you claim other SSS benefits such as sickness, maternity, disability, death, and funeral benefits.

Pay the maximum monthly contribution if you can. You’ll thank yourself for it in case any contingencies occur in the future.

Also, if the SSS member passes away, his or her legal spouse or primary beneficiaries will still be able to claim the pension from SSS.

Question 4: How do I know my Monthly Salary Credit?

Your monthly salary credit or MSC is based on your declared monthly salary. Please refer to the SSS Contribution table below to know your MSC and Monthly Contribution.

Click here to read: 

• How to File for SSS Retirement Benefit
• Why Pay the Maximum Contribution for your Retirement
• Complete List of Benefits from SSS