MANILA, Philippines - The Social Security System (SSS) is planning to open this year a savings window for members so they can look forward to more benefits on top of their retirement pension, a top official said.
While this will be voluntary, SSS said this would encourage members to better prepare for their retirement.
SSS president and chief executive officer Emilio de Quiros Jr. said the voluntary provident fund program offers members guaranteed retirement earnings that are higher than savings deposit rates.
“The voluntary provident fund is intended to augment benefits under the regular SSS program. We are finalizing the infrastructure and system support needed to implement the program and we expect to complete preparations in the coming months,” De Quiros said.
The SSS chief said the provident fund would be open to employers and members who are less than 55 years old, including self-employed (SE) workers, voluntary members (VM) and overseas Filipino workers (OFW).
Under the plan, self-employed workers and overseas Filipinos must be paying at maximum amount of contributions under the regular SSS program now pegged at P1,560 for at least six months immediately prior to the month of enrollment.
Payment of regular employees, meanwhile, should be on top of their SSS contributions.
“Unlike regular SSS premiums that have fixed deadlines, contributions to the provident fund can be made anytime. A member can put in up to P100,000 per year, with a minimum contribution of P1,000 per payment which must be in multiples of P100,” De Quiros said.
The provident fund savings are intended for retirement and total disability, medical and general purpose and funds withdrawn within the five-year retention period from the medical and general purpose portion will be subjected to penalties and charges.
Contributors can withdraw their savings either in lump sum, as monthly pension, or a combination of both when the member is separated from employment at age 60 or onwards, De Quiros said.
“Another advantage of the program is that SSS would compute the fund’s actual yield at the end of every year,” he said.
SSS, however, would guarantee earnings based on the five-year Treasury-bond rate for the 65% earmarked for retirement and total disability, and the remaining 35% component would be guaranteed to earn at the 364-day Treasury-bill rate, De Quiros added.