“`html
THE SOCIAL Security System (SSS) is launching a significant pension reform initiative commencing this September, which will systematically elevate the monthly pensions of all beneficiaries over a three-year timeline.
The Social Security Commission (SSC) ratified the SSS Pension Reform Initiative, which includes a phased, three-year enhancement in pensions for all SSS recipients, on July 11.
This marks the first multi-year modification of pensions in the SSS’ 68-year journey.
“Following a meticulous actuarial assessment, we are implementing a feasible and sustainable pension upgrade that benefits all recipients without jeopardizing the fund’s actuarial integrity,” SSS President and Chief Executive Officer Robert Joseph M. De Claro stated in a release.
Beginning this year, all beneficiaries as of Aug. 31, 2025, will obtain annual pension enhancements each September until 2027.
The pension for retirement and disability recipients will be increased by 10% every September until 2027. The pension for death or survivor recipients will see a 5% rise.
“After three years, pensions are expected to rise by about 33% for retirement/disability recipients and 16% for death/survivor recipients,” the SSS noted.
Approximately 3.8 million recipients will take advantage of the pension reform. This encompasses 2.6 million retirement/disability recipients and 1.2 million survivor beneficiaries.
The SSS conveyed that the pension reform initiative “will not require any increase in contributions.”
Mr. De Claro mentioned that the actuarial team confirms that the pension fund “continues to be financially robust.”
Citing its lead actuary, the SSS indicated that the reform will marginally reduce the fund’s lifespan — to 2049 from 2053 previously, but this is mitigated by strong cash flow from prior contribution modifications and improved collection efforts.
Mr. De Claro asserted their commitment to restoring fund life back to 2053 through expanded coverage and enhanced collection efficiency.
Finance Secretary Ralph G. Recto, who presides over the SSC, remarked that the pension increase will help stimulate economic growth as beneficiaries will possess greater purchasing power.
The SSS projected that the pension increase will inject approximately P92.8 billion into the Philippine economy from 2025 to 2027, while the Department of Finance (DoF) estimated this could soar to P117.2 billion.
“For retirement recipients aged 60-89 (99.4% of all retirement beneficiaries), around P4,923 is the average monthly pension just prior to the commencement of this reform initiative. This amount will rise to about P6,548 after the third tranche of the pension boost — an increase of P1,625 or 33%,” the DoF stated.
“After three years of pension increases commencing September 2025, SSS will have dispersed about P41,145 in additional pensions to such average retirement recipient,” it added.
In the meantime, the SSS affirmed its capability to execute the pension reform due to robust cash flows arising from the increase in incremental contribution rates completed in January 2025.
Under Republic Act No. 11199 or the Social Security Act of 2018, the SSS instituted incremental contribution rate increases of one percentage point every two years starting in 2019 from the initial contribution rate of 11%. — AMCS
Source link
“`
