Last April 2019, the Social Security System released the new SSS Contributions Table and Payment Schedule.
Check this new contribution table below:
In the table above, note the following:
Range of Compensation – where your salary falls
Monthly Salary Credit (MSC) – you can see that in the second column of the SSS table. It is the average monthly salary credit. This will be applied in calculating your monthly pension. (take special note to this)
ER column – is your employer’s contribution
EE column – is your monthly contribution.
From a previous contribution rate of 11%, now it’s already 12%.
Here is how the 12% is broken down:
Employer: 8%
Employee: 4%
Self-employed/Voluntary Member/OFW: 12%
As shown in the schedule of contributions, there is a cap of Php20,000 MSC (Monthly Salary Credit) from the previous limit of 16,000. Meaning, even if you are earning more than Php19,750/month your MSC is still at the maximum which is at Php20,000.
The MSC is an important factor in computing the retirement pension. Because of this increase, the possible retirement pension also increased when computed.
From the table above, identify the following:
- Where your salary falls in the range of compensation (first column).
- After knowing the range of compensation, note the corresponding MSC (second column) for that?
Once you know where you stand, now, let us compute for the maximum pension you can receive.
Let us suppose you are receiving an average of P40,000 monthly salary with 12 years of service.
From the range of compensation, you are in (see table 19,750 – over), your employer’s contribution (ER) will be Php1,600 and your contribution (EE) is Php800.00, for a grand total of Php2,400/month.
If you are self-employed, you will be paying the whole Php2,400.
Based on SSS computation, there are three formulas which we can use in calculating your monthly pension. The pension will be based on the highest computation from these 3 formulas.
Monthly Pension (MP) = P300 + (20% of AMSC first 10years) + (2% of AMSC 2 years)
MP = P300 + (20%*20,000) + (2% *20,000* 2)
MP = 300 + 4,000 + 800
Monthly Pension = P 5,100
Since you are a contributor for 12 years.
Monthly Pension = P 1,200.00
MP = 40% of AMSC
MP = 40% of 20,000
MP = 8,000
Monthly Pension = P 8,000
By comparing the 3 computation, we now choose the one with highest yield.
Based on above computations, the 3rd formula yields the highest monthly pension (Php8,000). Your monthly pension will be based on this amount.
But wait, there’s more…
Last January 2017, President Rodrigo Duterte approved the across-the-board P1,000 increase in the monthly pension of some 2.2 million SSS retirees. The order authorizing the released was signed last Feb. 22, 2019 and was enforced March of 2017.
Because of this…
8,000 + 1000 (across the board increase) = Php9,000 (the new retirement pension computation)
Now, if you want an easier way on how to compute for your possible retirement pension, then click the link below and you get to download the retirement calculator.
This is best used in laptop or desktop.
As you can see for now, the SSS retirement pension is not really a good sole provider for your retirement needs. I do hope you have other investments in place 20-30 years before you retire.
Note: To all Existing Subscribers, Doctors and Financial Advisors that are already subscribers of this Blog. You don’t need to Subscribe again, I will be sending you this FREE SSS Retirement Pension Calculator to your emails to enjoy. Just tell me if you want a copy. Say “Yes, I want copy too!” Here.
Disclaimer: Calculation above is not absolute, changes may takes place if the Monthly Salary Credit is updated, and other rules that shall be implemented that may affect the present rules. The computation above is the closest estimate. For exact computation, kindly visit the SSS branch nearest to you.
Source: SSS
Good luck on your future retirement.
For your Financial Health,
READ MORE:
- How to Build Doctor’s Retirement Fund?
- Retirement: Life After Medical Practice
- SSS P.E.S.O. Fund: How can it help you save for Retirement?
- How to Compute Company Retirement: What No One Tells You About
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yes i want a copy of sss calculator. Thanks.
erickbellen@yahoo.com