This is to respond to lots of questions sent to us about SSS pension adjustment for 1985 to 1989.
We’re not from SSS, but we based our responses on sources listed at the bottom of this blog post.
We could be wrong, so to be sure, you can ask SSS directly.
Why is there SSS pension adjustment for 1985 to 1989?
Because in the initial computation of pensions for pensioners who have SSS contributions for the years 1985 to 1989, these years were not counted and not added to the Total Number of Credited Years of Service (CYS).
CYS is part of the pension formula for pensioners who accumulated more than 120 contributions.
Why were the CYS for 1985 to 1989 not counted and considered in the initial pension computation?
Because contributions for 1985 to 1989 are not yet completely converted into digital data and not yet posted online, and the task to determine the CYS from these years takes a long time.
Apparently, SSS decided to compute pensions without the CYS for 1985 to 1989 and to just make the adjustments later on.
Apparently, they preferred delivering the first pensions to pensioners at the soonest possible time, and then deliver the adjustments later on. This could have been decided to prevent mega backlogs and mega complaints about super-slow SSS pension processing.
SSS says that there are more than 4.4 million images of R3 forms for the years 1985 to 1990. An SSS executive said in an Inquirer post that “manual verification takes a minimum of three months since it requires the digging up of records dated several years back.”
Check your online SSS account. Posted contributions reach back only up to the year 1990.
Then why were the CYS for years before 1985, like in the 1970s up to 1984, already counted and added and considered in the initial pension computation?
Because the CYS formula for these years is easy. SSS do not need to check if you paid at least 6 contributions for a certain year. For these years, it does not matter if you contributed only once or twice or 12 times in a certain year.
According to the SSS law, for the years BEFORE 1985, the CYS formula is:
Year of Coverage minus 1985
For example: A pensioner started contributing in 1970, so his Year of Coverage is 1970.
Then his CYS for the years BEFORE 1985 is: 1985 – 1970 = 15 years
Is the CYS formula for the years 1985 to 1989 difficult?
No. But the task of determining the number of CYS takes a long time. SSS needs to pore through old records to check if you paid at least 6 contributions for a certain year.
The CYS formula for 1985 to 1989 is:
CYS = the no. of years from 1985 to 1989 that had 6 or more monthly contributions for the year
So they need to look at the records of contributions for 1985 to 1989. And since these 1985 to 1989 records are not yet completely digitized, or not yet posted online, they have to check these records manually, hence the term “manual verification.”
So what is the specific effect of CYS correction?
The no. of CYS increases by 1 or 2 or 3 or 4 or 5.
Maximum of 5.
If CYS increases, the pension amount increases.
If there’s no year from 1985 to 1989 that had 6 or more contributions, then the initial pension computation is affirmed, and there is NO adjustment.
In pension computation, 4 formulas are used. The highest result from these 4 formulas will be your pension.
You can look at this pension computation formula below, so you can see the effect of a higher CYS.
This formula below usually results into the highest pension computation for pensioners who accumulated more than 10 years of contributions:
300 pesos + (20% x AMSC) + [(2% x AMSC) x (CYS – 10)]
AMSC means Average Monthly Salary Credit
For Those Asking About Their Pension Adjustments:
If you have your SSS Online account, you can check if your CYS for the years 1985 to 1989 are already counted and credited: Check your SSS Pension Computation.
You can also check your Actual Premiums to check if your 1985 to 1989 contributions are already posted.
If not yet enrolled, this is how to enroll in SSS Online Service.