Emailed Question:

I availed of the Early Retirement Program offered by my company after 31 years of service. Effective date was 18 December 2012.

I am now 55 years old.  Based on my record, I have made a total of 354 contributions as of December 2012. Do I still need to continue paying my SSS monthly premium of 1,560 pesos?


You, of course, know that you already qualify for pension, so the decision to continue paying your premiums would be based on whether you plan to have a higher monthly pension amount.

One of the 3 SSS pension formulas includes this value: 2% of average salary credit x no. of years in excess of 10, so an additional year or years would increase your premium.

But if you do continue, I suggest that you contribute only the maximum premium, 1,560 pesos, so that your average salary credit would remain high, if not the maximum. I think you can have gaps in monthly contributions if 1,560 is not sustainable every month.

These 2 formulas will apply in your case -- the higher result would be your pension

1. 40% of your average monthly salary credit, or

2. 300 pesos plus (20% of your average monthly salary credit) plus (2% of your average monthly salary credit x no.of years of service in excess of 10 years)

About Average Monthly Salary Credit:

SSS chooses the higher of these two:

1. average of ALL your monthly salary credits, or
2. average of your last 60 monthly salary credits immediately before your Semester of Retirement

About Number of Years:

Assuming you started paying your SSS contributions in 1980 or earlier, the counting of years would be:

A. 5 years (1985 minus 1980)

B. plus the no. of years you have at least 6 monthly contributions from 1985 to 2001

C. plus the no. of years you contributed since January 2002 (formula for this is you divide your number of monthly contributions since January 2002 by 12)

Formula for Counting Number of years:

No. of years = A + B + C

A = 1985 minus year of coverage

B = no. of years with at least 6 monthly contributions from 1985 to 2001

C = no. of monthly contributions paid from Jan 2002 divided by 12