Continuing SSS Membership Contributions in the Philippines for Overseas Filipinos, Filipino Immigrants Abroad — Does It Make Financial Sense?
If you’re a Filipino who has become an immigrant or permanent resident abroad, does it make sense if you continue paying your SSS membership contributions in the Philippines as a Voluntary Member?
According to the SSS rules, you can get a lifetime pension if you’ve paid at least 10 years or 120 monthly premiums before your semester of retirement, which is either at age 60 when one has retired from work, or at age 65 when retirement is compulsory.
If the number of your monthly contributions is less than 120, you get a lump sum.
Now, if you’re a permanent resident or immigrant abroad, and you have less than 120 monthly contributions, does it make sense continuing as an SSS voluntary member and completing the required 120 monthly contributions?
On the other hand, if you already have at least 120 monthly contributions, does it make sense continuing as a voluntary member and increasing the number of monthly contributions in the hope that the monthly pension would become higher?
To get a better answer to the above questions, let’s see how SSS computes the retirement benefit or the monthly pension:
A. For those who have paid less than 120 monthly contributions, the retirement benefit is a lump sum. The amount is equal to the total contributions paid by the member and by his/her employer plus interest.
B. For those who have paid at least 120 monthly contributions, the monthly pension would be the highest of the following three computations:
1. 40 percent of the average monthly salary credit
2. 300 pesos
plus 20 percent of the average monthly salary credit
plus 2 percent of the average monthly salary credit for each credited year of service in
excess of 10 years
3. 1,200 pesos when the credited years of service is 10 or more but less than 20, or
2,000 pesos when the credited years of service is 20 or more
For formulas Nos. 1 and 2 of letter B, take note that it says average monthly salary credit. (The salary credits are seen in the SSS Contribution Schedule) If you continue as a voluntary member, can you maintain paying the high monthly contributions that you and your previous employers previously paid? Does the plus-2-percent add value if you increase your number of years in excess of 10?
The best answer really is for you to:
- request for a copy of your SSS contributions (the SSS online inquiry can display only 20 years of contributions),
- and then compute your retirement benefit according to the SSS formula using your actual contributions and salary credits,
- and then compute using a projected or additional monthly contributions and salary credits,
- and then compare.