SSS PESO Fund: A Better Way To Save For Your Retirement4 min read
The Social Security System (SSS) offers pension loans, salary loans, and retirement benefits for Filipinos. In 2014, they launched another financial product called the SSS Personal Equity and Savings Option fund, or the SSS PESO fund.
More and more Filipinos are opting for the SSS PESO Fund because it is tax-free, and the interest rates are much higher compared to banks.
But before we get into the details of the SSS Peso Fund, it is also important that SSS members know how the Retirement program works. This will enable us to fully appreciate its additional benefits.
A retirement program of the SSS
There are two types of retirement benefits for SSS members: the monthly pension and the lump-sum pension.
The monthly pension is a lifetime benefit meant to aid to the retiree who has paid at least 120 monthly contributions to SSS prior to the semester of retirement.
As for the lump sum, it is granted to a retiree who has not paid the required 120 monthly contributions.
These are equal to the total contributions paid by the member and by the employer including the interest.
(Read: SSS Pension: Computation, Requirements, Loans, and Benefits)
How does the monthly computation work?
This depends on the member’s monthly paid contributions, the member’s credited years of service, and the number of his dependent minor children that should not exceed five.
Formula computation for the monthly retirement pension:
The monthly pension will be the highest amount resulting from either one of these three pension formulas:
- 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 10 years;
- Forty (40) percent of the average monthly salary credit;
- 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, and 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
What is the SSS PESO Fund?
The SSS PESO Fund is an optional savings/investment that provides SSS members with an opportunity to earn additional income by paying higher monthly contributions.
Through this program, members who have the capacity to contribute more than the required contributions are given the opportunity to save more so they may receive additional benefits in the future
(Read: SSS Salary Loan Application: A How-To Guide)
Benefits of the SSS PESO Fund
- Tax-free earnings and benefits
- Contributions are placed in sovereign guaranteed investments and guaranteed earnings.
- 65% of total funds allocated for retirement and the remaining 10% are allocated for general purpose expenses (education, emergencies, etc)
- Benefits can be availed by filing a total disability, retirement, or death claim under the regular SSS program
- Death benefits paid in one lump sum to the beneficiaries
- Both Retirement and Disability SSS benefits can be received in one lump sum, monthly pension or a combination of both
- Interest rates are higher compared to banks. The earning rate of SSS PESO Fund is between 1.85% to 3.75% annually depending on the performance of the Treasury bill
How to enrol in the SSS PESO Fund
Qualified SSS members may enroll in this program by logging into My SSS account online.
- Click PESO Fund under the E-Services menu
- Once registered, fill out the online SSS PESO Fund Enrollment form
- Download the form and bring it to your nearest SSS branch
Membership begins the moment the first contribution is paid. Contribution varies and ranges from P1,000 to the maximum of P100,000.
Who are eligible to enroll in the SSS PESO Fund?
- Those below 55 years old.
- Members who have paid at least six consecutive monthly contributions within the 12 month period to the regular SSS program prior to enrollment.
- Eligible members who are employed, self-employed, voluntary members, and Overseas Filipino Worker (OFW) that meets the aid criteria.
- Maximum contributions under the regular SSS program should be paid by the self-employed, voluntary members, and overseas Filipino workers (OFW)
- No final claim has been filed under the regular SSS program
When can they receive the benefits?
Members shall receive the benefits upon filing a retirement, total disability, or death claim under the regular SSS Program. Retirement or total disability benefits that consist of their monthly contributions and earnings from the SSS PESO fund may choose to receive this in monthly pension or lump sum, or a combination of both.
In case of death of the member, the beneficiaries will receive the full amount in one lump-sum payment.
(Read: Beyond Pensions And Loans: 3 Government Savings Programs To Check Out)
How is the SSS Peso Fund allocated?
The member’s contributions and earnings are allocated in three types of accounts:
1. Retirement Total Disability
Percentage allocation is 65% with guaranteed earnings based on five-year T-Bond rates.
Twenty-five percent with guaranteed earnings based on 364 days T-Bill rates.
3. General Purpose (education, housing, livelihood, unemployment)
Ten percent with guaranteed earnings based on 364-day T-Bill rates.